Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | May 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-10315 | |
Entity Registrant Name | Encompass Health Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 63-0860407 | |
Entity Address, Address Line One | 9001 Liberty Parkway | |
Entity Address, City or Town | Birmingham | |
Entity Address, State or Province | AL | |
Entity Address, Postal Zip Code | 35242 | |
City Area Code | 205 | |
Local Phone Number | 967-7116 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | EHC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,405,112 | |
Entity Central Index Key | 0000785161 | |
Document Fiscal Year Focus | 2020 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement Of Comprehensive Income And Income Statement [Abstract] | ||
Net operating revenues | $ 1,182 | $ 1,124 |
Operating expenses: | ||
Salaries and benefits | 679.1 | 620.8 |
Other operating expenses | 159.6 | 150.1 |
Occupancy costs | 20.2 | 19.6 |
Supplies | 45.7 | 40.1 |
General and administrative expenses | 35.6 | 53.4 |
Depreciation and amortization | 58.8 | 52.5 |
Government, class action, and related settlements | 2.8 | 0 |
Total operating expenses | 1,001.8 | 936.5 |
Interest expense and amortization of debt discounts and fees | 43.2 | 37.2 |
Other expense (income) | 1.9 | (3.7) |
Equity in net income of nonconsolidated affiliates | (0.8) | (2.5) |
Income from continuing operations before income tax expense | 135.9 | 156.5 |
Provision for income tax expense | 27.1 | 30.8 |
Income from continuing operations | 108.8 | 125.7 |
Loss from discontinued operations, net of tax | (0.1) | (0.5) |
Net income | 108.7 | 125.2 |
Comprehensive income | 108.7 | 125.2 |
Less: Net income attributable to noncontrolling interests | (21.7) | (22.9) |
Less: Comprehensive income attributable to noncontrolling interests | (21.7) | (22.9) |
Net income attributable to Encompass Health | 87 | 102.3 |
Comprehensive income attributable to Encompass Health | $ 87 | $ 102.3 |
Weighted average common shares outstanding: | ||
Basic (shares) | 98.2 | 98.4 |
Diluted (shares) | 99.6 | 99.7 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 0.88 | $ 1.05 |
Discontinued operations (in dollars per share) | 0 | (0.01) |
Net Income (in dollars per share) | 0.88 | 1.04 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | 0.87 | 1.04 |
Discontinued operations (in dollars per share) | 0 | (0.01) |
Net income (in dollars per share) | $ 0.87 | $ 1.03 |
Amounts attributable to Encompass Health common shareholders: | ||
Income from continuing operations | $ 87.1 | $ 102.8 |
Loss from discontinued operations, net of tax | (0.1) | (0.5) |
Net income attributable to Encompass Health | $ 87 | $ 102.3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Current assets: | |||||
Cash and cash equivalents | $ 104.9 | $ 94.8 | $ 56.1 | $ 69.2 | |
Restricted cash | 56.7 | 57.4 | 59 | 59 | |
Accounts receivable | 543.4 | 506.1 | |||
Other current assets | 79.5 | 97.5 | |||
Total current assets | 784.5 | 755.8 | |||
Property and equipment, net | 2,003.3 | 1,959.3 | |||
Operating lease right-of-use assets | 267.9 | 276.5 | |||
Goodwill | 2,312.1 | 2,305.2 | |||
Intangible assets, net | 464.7 | 476.3 | |||
Deferred income tax assets | 1.5 | 2.9 | |||
Other long-term assets | 303.7 | 304.7 | |||
Total assets | [1] | 6,137.7 | 6,080.7 | ||
Current liabilities: | |||||
Current portion of long-term debt | 40.2 | 39.3 | |||
Current operating lease liabilities | 40.8 | 40.4 | |||
Accounts payable | 98 | 94.6 | |||
Accrued expenses and other current liabilities | 407.2 | 546.7 | |||
Total current liabilities | 586.2 | 721 | |||
Long-term debt, net of current portion | 3,321.9 | 3,023.3 | |||
Long-term operating lease liabilities | 235.1 | 243.8 | |||
Other long-term liabilities | 163.3 | 159.9 | |||
Total liabilities | 4,306.5 | 4,148 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 34 | 239.6 | |||
Shareholders’ equity: | |||||
Encompass Health shareholders’ equity | 1,443.9 | 1,352.2 | |||
Noncontrolling interests | 353.3 | 340.9 | |||
Total shareholders’ equity | 1,797.2 | 1,693.1 | $ 1,616.5 | $ 1,557 | |
Total liabilities and shareholders' equity | [1] | $ 6,137.7 | $ 6,080.7 | ||
[1] | Our consolidated assets as of March 31, 2020 and December 31, 2019 include total assets of variable interest entities of $222.2 million and $215.0 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2020 and December 31, 2019 include total liabilities of the variable interest entities of $39.3 million and $41.1 million , respectively. See Note 2 , Variable Interest Entities . |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Assets | [1] | $ 6,137.7 | $ 6,080.7 |
Liabilities | 4,306.5 | 4,148 | |
VIE | |||
Assets | 222.2 | 215 | |
Liabilities | $ 39.3 | $ 41.1 | |
[1] | Our consolidated assets as of March 31, 2020 and December 31, 2019 include total assets of variable interest entities of $222.2 million and $215.0 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2020 and December 31, 2019 include total liabilities of the variable interest entities of $39.3 million and $41.1 million , respectively. See Note 2 , Variable Interest Entities . |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Capital in Excess of Par Value | Accumulated Deficit | Treasury Stock | Noncontrolling Interests |
Balance at beginning of period at Dec. 31, 2018 | $ 1,557 | $ 1.1 | $ 2,588.7 | $ (885.2) | $ (427.9) | $ 280.3 |
Balance at beginning of period (shares) at Dec. 31, 2018 | 98.9 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 121.2 | 102.3 | 18.9 | |||
Receipt of treasury stock | (15.9) | (15.9) | ||||
Receipt of treasury stock (shares) | (0.3) | |||||
Dividends declared (per share) | (26.9) | (26.9) | ||||
Stock-based compensation | 7 | 7 | ||||
Distributions declared | (15.3) | (15.3) | ||||
Capital contributions from consolidated affiliates | 7.1 | 7.1 | ||||
Fair value adjustments to redeemable noncontrolling interests, net of tax | (20.3) | (20.3) | ||||
Repurchases of common stock in open market | (11) | (11) | ||||
Repurchases of common stock in open market (shares) | (0.2) | |||||
Other | 13.6 | 2.8 | (0.4) | 11.2 | ||
Other (shares) | 0.7 | |||||
Balance at end of period at Mar. 31, 2019 | 1,616.5 | $ 1.1 | 2,551.3 | (782.9) | (455.2) | 302.2 |
Balance at end of period (shares) at Mar. 31, 2019 | 99.1 | |||||
Balance at beginning of period at Dec. 31, 2019 | 1,693.1 | $ 1.1 | 2,369.9 | (526.5) | (492.3) | 340.9 |
Balance at beginning of period (shares) at Dec. 31, 2019 | 98.6 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 106.7 | 87 | 19.7 | |||
Receipt of treasury stock | (15.6) | (15.6) | ||||
Receipt of treasury stock (shares) | (0.2) | |||||
Dividends declared (per share) | (27.9) | (27.9) | ||||
Exchange of Holdings shares | 46.3 | 27.1 | 19.2 | |||
Exchange of Holding Shares (shares) | 0.6 | |||||
Stock-based compensation | 7.1 | 7.1 | ||||
Distributions declared | (15.5) | (15.5) | ||||
Capital contributions from consolidated affiliates | 5.8 | 5.8 | ||||
Repurchases of common stock in open market | (4.9) | (4.9) | ||||
Repurchases of common stock in open market (shares) | (0.1) | |||||
Other | 2.1 | (0.3) | 2.4 | |||
Other (shares) | 0.5 | |||||
Balance at end of period at Mar. 31, 2020 | $ 1,797.2 | $ 1.1 | $ 2,376.2 | $ (439.5) | $ (493.9) | $ 353.3 |
Balance at end of period (shares) at Mar. 31, 2020 | 99.4 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared on common stock (in dollars per share) | $ 0.28 | $ 0.27 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 108.7 | $ 125.2 |
Loss from discontinued operations, net of tax | 0.1 | 0.5 |
Adjustments to reconcile net income to net cash provided by operating activities— | ||
Depreciation and amortization | 58.8 | 52.5 |
Stock-based compensation | 7.1 | 19.4 |
Deferred tax expense | 1.4 | 2.6 |
Other, net | 7.7 | (0.8) |
Change in assets and liabilities, net of acquisitions— | ||
Accounts receivable | (36.6) | (29.6) |
Other assets | 15.8 | (3.8) |
Accrued payroll | (24) | (14.8) |
Other liabilities | (109.6) | 11.7 |
Net cash used in operating activities of discontinued operations | (0.1) | (3) |
Total adjustments | (79.5) | 34.2 |
Net cash provided by operating activities | 29.3 | 159.9 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (83.5) | (72.3) |
Acquisitions of businesses, net of cash acquired | (1.1) | (13.7) |
Other, net | 1.6 | (5.5) |
Net cash used in investing activities | (83) | (91.5) |
Cash flows from financing activities: | ||
Borrowings on revolving credit facility | 330 | 25 |
Payments on revolving credit facility | (25) | (30) |
Dividends paid on common stock | (29) | (28.3) |
Purchase of equity interests in consolidated affiliates | (162.3) | 0 |
Distributions paid to noncontrolling interests of consolidated affiliates | (19.1) | (19.5) |
Taxes paid on behalf of employees for shares withheld | (15.6) | (15.9) |
Other, net | (7.9) | (13) |
Net cash provided by (used in) financing activities | 71.1 | (81.7) |
Increase (decrease) in cash, cash equivalents, and restricted cash | 17.4 | (13.3) |
Cash, cash equivalents, and restricted cash at beginning of period | 159.6 | 133.5 |
Cash, cash equivalents, and restricted cash at end of period | 177 | 120.2 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | ||
Cash and cash equivalents at beginning of period | 94.8 | 69.2 |
Restricted cash at beginning of period | 57.4 | 59 |
Restricted cash included in other long-term assets at beginning of period | 7.4 | 5.3 |
Cash, cash equivalents, and restricted cash at beginning of period | 159.6 | 133.5 |
Cash and cash equivalents at end of period | 104.9 | 56.1 |
Restricted cash at end of period | 56.7 | 59 |
Restricted cash included in other long-term assets at end of period | 15.4 | 5.1 |
Cash, cash equivalents, and restricted cash at end of period | 177 | 120.2 |
Supplemental schedule of noncash financing activity: | ||
Adoption of ASC 842 | $ 0 | $ 349.4 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Encompass Health Corporation, incorporated in Delaware in 1984, including its subsidiaries, is one of the nation’s largest providers of post-acute healthcare services, offering both facility-based and home-based patient services in 37 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. We manage our operations and disclose financial information using two reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. See also Note 10 , Segment Reporting . The accompanying unaudited condensed consolidated financial statements of Encompass Health Corporation and Subsidiaries should be read in conjunction with the consolidated financial statements and accompanying notes contained in Encompass Health’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 27, 2020 (the “ 2019 Form 10‑K ”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been omitted in these interim statements, as allowed by such SEC rules and regulations. The condensed consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading. The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In our opinion, the accompanying condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state the financial position, results of operations, and cash flows for each interim period presented. Net Operating Revenues — Our Net operating revenues disaggregated by payor source and segment are as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 2020 2019 Medicare $ 641.9 $ 638.9 $ 226.2 $ 214.8 $ 868.1 $ 853.7 Medicare Advantage 111.5 85.2 29.4 25.5 140.9 110.7 Managed care 90.2 83.5 12.1 8.4 102.3 91.9 Medicaid 30.7 26.2 4.2 4.3 34.9 30.5 Other third-party payors 11.0 10.0 — — 11.0 10.0 Workers’ compensation 6.9 8.2 0.3 0.2 7.2 8.4 Patients 5.5 6.1 0.4 0.4 5.9 6.5 Other income 11.5 12.0 0.2 0.3 11.7 12.3 Total $ 909.2 $ 870.1 $ 272.8 $ 253.9 $ 1,182.0 $ 1,124.0 See Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2019 Form 10-K for our policy related to Net operating revenues . Risks and Uncertainties — The novel coronavirus disease 2019 (“COVID-19”) pandemic has caused a disruption to our nation’s healthcare system. Such disruption includes reductions in the availability of personal protective equipment (“PPE”) to prevent spread of the disease during patient treatment and increases in the cost of PPE. Generally, elective procedures were postponed by physicians and acute-care hospitals in order to prepare for the expected volume of COVID-19 patients and reduce the risk of exposure to COVID-19. I n March, we experienced decreased volumes in both segments which we believe resulted from a number of conditions related to the COVID-19 pandemic including: lower acute-care hospital censuses due to the deferral of elective surgeries and shelter-in-place orders, restrictive visitation policies in place at acute-care hospitals that have served to severely limit access to patients and caregivers by our clinical rehabilitation liaisons and care transition coordinators, lock down of assisted living facilities, and heightened anxiety among patients and their family members regarding the risk of exposure to COVID-19 during acute-care and post-acute care treatment. In March and April 2020, the federal government began to undertake numerous legislative and regulatory initiatives designed to provide relief to the healthcare industry during the COVID-19 pandemic . A specific initiative impacting us is the Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) which temporarily suspends the automatic 2% reduction of Medicare program payments known as “sequestration” for the period of May 1 through December 31, 2020 and authorizes the cash distribution of relief funds from the United States Department of Health and Human Services (“HHS”) to healthcare providers in response to the COVID-19 pandemic. On April 10, 2020, we began to receive the CARES Act relief fund payments, for which we did not apply, from HHS. To date, our inpatient rehabilitation hospitals and home health and hospice agencies have received in aggregate approximately $238 million . On May 7, 2020, we informed HHS we would not accept any of the CARES Act relief funds. We are currently seeking direction on how to process the repayment of those funds. Additionally, the CARES Act and a series of waivers and guidance issued by the Centers for Medicare and Medicaid Services (“CMS”) suspend various Medicare patient coverage criteria and documentation and care requirements in an effort to provide regulatory relief. For inpatient rehabilitation, the regulatory relief includes the temporary suspension of the requirement that patients must be able to tolerate a minimum of 3 hours of therapy per day for 5 days per week, waiver of the requirement that at least 60% of a facility’s patients must have a diagnosis from at least 1 of 13 specified medical conditions that typically require intensive therapy and supervision, and waiver of the requirement for a physician to conduct and document a post-admission evaluation. In addition, the requirement of physician face-to-face visits at least 3 days a week may be fulfilled using telehealth. For home health, the relief includes the allowance of nurse practitioners and physician assistants under certain conditions to certify, establish and periodically review the plan of care, as well as supervise the provision of items and services for beneficiaries under the Medicare home health benefit and expands the use of telehealth. For hospice, the relief includes the temporary waiver of the requirement to use volunteers and to conduct a nurse visit every two weeks to evaluate aides, as well as the expanded use of telehealth for routine services and patient recertification. As discussed in Note 3, Long-term Debt , in April 2020, we amended our credit agreement primarily to provide covenant relief due to business disruptions from the COVID-19 pandemic. The amendment included, among other things, the carve-out of the COVID-19 pandemic from the definition of material adverse effect for 364 days and modifications to the interest coverage and leverage ratios under the agreement. Recently Adopted Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which provides guidance for accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance resulted in an immaterial change to our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It requires entities to account for such costs consistent with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted — In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance is effective for us beginning January 1, 2021, including interim periods within that reporting period. Early adoption is permitted. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities As of March 31, 2020 and December 31, 2019 , we consolidated nine and eight , respectively, limited partnership-like entities that are variable interest entities (“VIEs”) and of which we are the primary beneficiary. Our ownership percentages in these entities range from 50.0% to 75.0% as of March 31, 2020 . Through partnership and management agreements with or governing each of these entities, we manage all of these entities and handle all day-to-day operating decisions. Accordingly, we have the decision making power over the activities that most significantly impact the economic performance of our VIEs and an obligation to absorb losses or receive benefits from the VIE that could potentially be significant to the VIE. These decisions and significant activities include, but are not limited to, marketing efforts, oversight of patient admissions, medical training, nurse and therapist scheduling, provision of healthcare services, billing, collections, and creation and maintenance of medical records. The terms of the agreements governing each of our VIEs prohibit us from using the assets of each VIE to satisfy the obligations of other entities. The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheet, are as follows (in millions): March 31, 2020 December 31, 2019 Assets Current assets: Cash and cash equivalents $ 1.1 $ 0.2 Accounts receivable 31.3 29.3 Other current assets 7.7 6.4 Total current assets 40.1 35.9 Property and equipment, net 120.9 122.6 Operating lease right-of-use assets 5.8 6.0 Goodwill 19.2 15.9 Intangible assets, net 4.8 3.3 Other long-term assets 31.4 31.3 Total assets $ 222.2 $ 215.0 Liabilities Current liabilities: Current portion of long-term debt $ 0.9 $ 0.8 Current operating lease liabilities 1.5 1.4 Accounts payable 5.6 6.7 Accrued expenses and other current liabilities 16.6 17.0 Total current liabilities 24.6 25.9 Long-term debt, net of current portion 10.3 10.5 Long-term operating lease liabilities 4.4 4.7 Total liabilities $ 39.3 $ 41.1 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Our long-term debt outstanding consists of the following (in millions): March 31, 2020 December 31, 2019 Credit Agreement— Advances under revolving credit facility $ 350.0 $ 45.0 Term loan facilities 261.9 265.2 Bonds payable— 5.125% Senior Notes due 2023 297.5 297.3 5.75% Senior Notes due 2024 697.5 697.3 5.75% Senior Notes due 2025 345.8 345.6 4.50% Senior Notes due 2028 491.9 491.7 4.75% Senior Notes due 2030 491.8 491.7 Other notes payable 44.5 44.7 Finance lease obligations 381.2 384.1 3,362.1 3,062.6 Less: Current portion (40.2 ) (39.3 ) Long-term debt, net of current portion $ 3,321.9 $ 3,023.3 Borrowings under our revolving credit facility as of March 31, 2020 were primarily used for the purchase of equity and vested stock appreciation rights from management investors of our home health and hospice segment. For additional information see Note 4, Redeemable Noncontrolling Interests, and Note 6, Share-Based Payments . In April 2020, we amended our existing credit agreement. The following are the changes made to the material provisions of the credit agreement: 1. Amendment of the financial covenants to update the applicable interest coverage ratio and leverage ratio included in that covenant. The revised applicable ratios are set forth below. Fiscal Quarters Ending Interest Coverage Ratio December 31, 2019 and March 31, 2020 3.00 to 1.00 June 30, 2020, September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 2.00 to 1.00 March 31, 2022 and thereafter 3.00 to 1.00 Fiscal Quarters Ending Leverage Ratio December 31, 2019 and March 31, 2020 4.50 to 1.00 June 30, 2020 4.75 to 1.00 September 30, 2020 5.50 to 1.00 December 31, 2020 6.50 to 1.00 March 31, 2021 6.50 to 1.00 June 30, 2021 6.00 to 1.00 September 30, 2021 5.50 to 1.00 December 31, 2021 5.00 to 1.00 March 31, 2022 and thereafter 4.25 to 1.00 2. Amendment of the definition of “Material Adverse Effect” to carve out the direct and indirect impacts of COVID-19 and the related legislative, regulatory and executive actions on us from that definition for a period of 364 days; and 3. Amendment of the investment limitation covenant and the restricted payment limitation covenant, to add to each a leverage ratio condition (not in excess of 4.50x) to the provisions allowing unlimited investments and restricted payments in the event certain conditions are met including a senior secured leverage ratio (not in excess of 2:00x) and the existence of no events of default in addition to the new leverage ratio condition. All other material terms of the existing credit agreement remain the same and are described in Note 10, Long-term Debt , to the consolidated financial statements accompanying the 2019 Form 10‑K . |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The following is a summary of the activity related to our Redeemable noncontrolling interests during the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 2019 Balance at beginning of period $ 239.6 $ 261.7 Net income attributable to noncontrolling interests 2.0 4.0 Distributions declared (2.1 ) (1.8 ) Contribution to joint venture 3.1 — Reclassification to noncontrolling interests — (11.2 ) Purchase of redeemable noncontrolling interests (162.3 ) — Exchange transaction (46.3 ) — Change in fair value — 20.3 Balance at end of period $ 34.0 $ 273.0 The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 2019 Net income attributable to nonredeemable noncontrolling interests $ 19.7 $ 18.9 Net income attributable to redeemable noncontrolling interests 2.0 4.0 Net income attributable to noncontrolling interests $ 21.7 $ 22.9 On December 31, 2014, we acquired 83.3% of our home health and hospice business when we purchased EHHI Holdings, Inc. (“EHHI”). In the acquisition, we acquired all of the issued and outstanding equity interests of EHHI, other than equity interests contributed to Encompass Health Home Health Holdings, Inc. (“Holdings”), a subsidiary of Encompass Health and an indirect parent of EHHI, by certain sellers in exchange for shares of common stock of Holdings. Those sellers were members of EHHI management, and they contributed a portion of their shares of common stock of EHHI, valued at approximately $64 million on the acquisition date, in exchange for approximately 16.7% of the outstanding shares of common stock of Holdings. At any time after December 31, 2017, each management investor had the right (but not the obligation) to have his or her shares of Holdings stock repurchased by Encompass Health for a cash purchase price per share equal to the fair value. In February 2018, each management investor exercised the right to sell one-third of his or her shares of Holdings stock to Encompass Health, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. On February 21, 2018, Encompass Health settled the acquisition of those shares upon payment of approximately $65 million in cash. In July 2019, we received additional exercise notices, representing approximately 5.6% of the outstanding shares of the common stock of Holdings. In September 2019, Encompass Health settled the acquisition of those shares upon payment of approximately $163 million in cash. In January 2020, we received additional exercise notices, representing approximately 4.3% of the outstanding shares of the common stock of Holdings. On February 18, 2020, Encompass Health settled the acquisition of those shares upon payment of approximately $162 million in cash. Upon settlement of these exercises, approximately $46 million of the shares of Holdings held by two management investors remained outstanding. On February 20, 2020, Encompass Health entered into exchange agreements (each, an “Exchange Agreement”) with these two management investors, pursuant to which they had the right to exchange all of the remaining shares of Holdings held by them for shares of common stock of Encompass Health (the “EHC Shares”). Each of the Exchange Agreements provided that the management investor must deliver a written exchange notice (an “Exchange Notice”) to Encompass Health in order to exchange his or her remaining shares of Holdings for EHC Shares. Each Exchange Agreement further provided that the number of EHC Shares to be delivered to the management investor was to be determined by dividing the fair value of the shares of Holdings held by the management investor on the date of the Exchange Agreement by the last reported sales price of Encompass Health’s common stock on the New York Stock Exchange (the “NYSE”) on the date of delivery of the Exchange Notice. On February 20, 2020, Encompass Health received an Exchange Notice from each of the management investors. Based on the last sales price of Encompass Health’s common stock on the NYSE on February 20, 2020, Encompass Health delivered an aggregate 560,957 EHC Shares to the management investors. The total number of EHC Shares issued pursuant to the exchange agreements on March 6, 2020 represented less than 0.6% of the outstanding shares of Encompass Health common stock. Encompass Health issued the EHC Shares from its treasury shares. Encompass Health now owns 100% of Holdings and EHHI. See also Note 5 , Fair Value Measurements . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of March 31, 2020 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (1) Other long-term assets: Equity securities $ 61.8 $ — $ 61.8 $ — M Debt securities 9.4 9.4 — — M Redeemable noncontrolling interests 34.0 — — 34.0 I As of December 31, 2019 Other long-term assets: Equity securities $ 63.5 $ — $ 63.5 $ — M Debt securities 12.6 12.6 — — M Redeemable noncontrolling interests 239.6 — — 239.6 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). The decrease in Redeemable noncontrolling interests from December 31, 2019 to March, 31, 2020 primarily resulted from the final purchase of equity interests in Holdings from management investors discussed in Note 4 , Redeemable Noncontrolling Interests . The fair values of our financial assets and liabilities are determined as follows: • Equity and Debt securities - The fair values of our equity and debt securities are determined based on quoted market prices in active markets or quoted prices, dealer quotations, or alternative pricing sources supported by observable inputs in markets that are not considered to be active. • Redeemable noncontrolling interests - The fair value of the Redeemable noncontrolling interests related to our home health segment was determined using the product of a twelve-month adjusted EBITDA measure and a specified median market price multiple based on a basket of public home health companies and transactions, after adding cash and deducting indebtedness that included the outstanding principal balance under any intercompany notes. To determine the fair value of the Redeemable noncontrolling interests in our joint venture hospitals, we use the applicable hospitals’ projected operating results and cash flows discounted using a rate that reflects market participant assumptions for the applicable facilities. The projected operating results use management’s best estimates of economic and market conditions over the forecasted periods including assumptions for pricing and volume, operating expenses, and capital expenditures. In addition, there are assets and liabilities that are not required to be measured at fair value on a recurring basis. However, these assets may be recorded at fair value as a result of impairment charges or other adjustments made to the carrying value of the applicable assets. During the three months ended March 31, 2020 and March 31, 2019 , we did not record any material gains or losses related to these assets. As discussed in Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” to the consolidated financial statements accompanying the 2019 Form 10‑K , the carrying value equals fair value for our financial instruments that are not included in the table below and are classified as current in our condensed consolidated balance sheets. The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions): As of March 31, 2020 As of December 31, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 350.0 $ 350.0 $ 45.0 $ 45.0 Term loan facilities 261.9 263.3 265.2 266.6 5.125% Senior Notes due 2023 297.5 298.5 297.3 306.6 5.75% Senior Notes due 2024 697.5 703.5 697.3 708.8 5.75% Senior Notes due 2025 345.8 344.3 345.6 369.7 4.50% Senior Notes due 2028 491.9 491.3 491.7 519.4 4.75% Senior Notes due 2030 491.8 496.1 491.7 520.0 Other notes payable 44.5 44.5 44.7 44.7 Financial commitments: Letters of credit — 36.7 — 38.9 Fair values for our long-term debt and financial commitments are determined using inputs, including quoted prices in nonactive markets, that are observable either directly or indirectly, or Level 2 inputs within the fair value hierarchy. See Note 1, Summary of Significant Accounting Policies , “Fair Value Measurements,” to the consolidated financial statements accompanying the 2019 Form 10‑K . |
Share-Based Payments
Share-Based Payments | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Payments | Share-Based Payments In the first quarter of 2020 , we issued a total of 0.4 million restricted stock awards to members of our management team and our board of directors. Approximately 0.2 million of these awards contain only a service condition, while the remainder contain both a service and a performance condition. For the awards that include a performance condition, the number of shares that will ultimately be granted to employees may vary based on the Company’s performance during the applicable two year performance measurement period. Additionally, we granted 0.1 million stock options to members of our management team. The fair value of these awards and options was determined using the policies described in Note 1, Summary of Significant Accounting Policies , and Note 14, Share-Based Payments , to the consolidated financial statements accompanying the 2019 Form 10‑K . In conjunction with the EHHI acquisition discussed in Note 4 , Redeemable Noncontrolling Interests , we granted stock appreciation rights (“SARs”) based on Holdings common stock to certain members of EHHI management at closing. Half of the SARs vested on December 31, 2018 and the remainder vested on December 31, 2019. Upon exercise, each SAR must be settled for cash in the amount by which the per share fair value of Holdings’ common stock on the exercise date exceeds the per share fair value on the grant date. As of December 31, 2019, the fair value of the remaining 115,545 SARs was approximately $101 million , all of which was included in Accrued expenses and other current liabilities in the condensed consolidated balance sheet. In January 2020, members of the management team exercised the remaining SARs, and in February 2020, we settled those awards upon payment of approximately $101 million in cash. For additional information, see Note 14, Share-Based Payments , to the consolidated financial statements accompanying the 2019 Form 10‑K |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our Provision for income tax expense of $27.1 million and $30.8 million for the three months ended March 31, 2020 and March 31, 2019 |
Earnings per Common Share
Earnings per Common Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Common Share | Earnings per Common Share The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts): Three Months Ended March 31, 2020 2019 Basic: Numerator: Income from continuing operations $ 108.8 $ 125.7 Less: Net income attributable to noncontrolling interests included in continuing operations (21.7 ) (22.9 ) Less: Income allocated to participating securities (0.3 ) (0.4 ) Income from continuing operations attributable to Encompass Health common shareholders 86.8 102.4 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) (0.5 ) Net income attributable to Encompass Health common shareholders $ 86.7 $ 101.9 Denominator: Basic weighted average common shares outstanding 98.2 98.4 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.88 $ 1.05 Discontinued operations — (0.01 ) Net income $ 0.88 $ 1.04 Diluted: Numerator: Income from continuing operations $ 108.8 $ 125.7 Less: Net income attributable to noncontrolling interests included in continuing operations (21.7 ) (22.9 ) Income from continuing operations attributable to Encompass Health common shareholders 87.1 102.8 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) (0.5 ) Net income attributable to Encompass Health common shareholders $ 87.0 $ 102.3 Denominator: Diluted weighted average common shares outstanding 99.6 99.7 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.87 $ 1.04 Discontinued operations — (0.01 ) Net income $ 0.87 $ 1.03 The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): Three Months Ended March 31, 2020 2019 Basic weighted average common shares outstanding 98.2 98.4 Restricted stock awards, dilutive stock options, and restricted stock units 1.4 1.3 Diluted weighted average common shares outstanding 99.6 99.7 See Note 17, Earnings per Common Share , to the consolidated financial statements accompanying the 2019 Form 10‑K |
Contingencies and Other Commitm
Contingencies and Other Commitments | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Other Commitments | Contingencies and Other Commitments We operate in a highly regulated industry in which healthcare providers are routinely subject to litigation. As a result, various lawsuits, claims, and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. The resolution of any such lawsuits, claims, or legal and regulatory proceedings could materially and adversely affect our financial position, results of operations, and cash flows in a given period. Nichols Litigation— We were named as a defendant in a lawsuit filed March 28, 2003 by several individual stockholders in the Circuit Court of Jefferson County, Alabama, captioned Nichols v. HealthSouth Corp . In July 2019, we entered into settlement agreements with all but one plaintiff and paid those settling plaintiffs an aggregate amount of cash less than $0.1 million . The remaining plaintiff alleges that we, some of our former officers, and our former investment bank engaged in a scheme to overstate and misrepresent our earnings and financial position. The plaintiff is seeking compensatory and punitive damages. This case was stayed in the circuit court on August 8, 2005. However, the complaint has been amended from time to time, including to request certification as a class action. Additionally, one of the former officers named as a defendant has repeatedly attempted to remove the case to federal district court. We filed our latest motion to remand the case back to state court on January 10, 2013. On September 27, 2013, the federal court remanded the case back to state court. On December 10, 2014, we filed a motion to dismiss on the grounds the plaintiffs lacked standing because their claims were derivative in nature, and the claims were time-barred by the statute of limitations. On May 26, 2016, the trial court granted our motion to dismiss. On appeal, the Supreme Court of Alabama reversed the trial court’s dismissal on March 23, 2018. On April 6, 2018, we filed an application for rehearing with the Alabama Supreme Court. On March 22, 2019, the Alabama Supreme Court denied our application for rehearing and remanded the case to the trial court for further proceedings. The trial court recently vacated its original scheduling order, so we do not currently know when this trial will begin. We intend to vigorously defend ourselves in this case against the sole remaining plaintiff. Based on the stage of litigation, review of the current facts and circumstances as we understand them, the nature of the underlying claim, the results of the proceedings to date, and the nature and scope of the defense we continue to mount, we do not believe an adverse judgment or settlement is probable in this matter, and it is also not possible to estimate an amount of loss, if any, or range of possible loss that might result from an adverse judgment or settlement of this case. Other Matters— The False Claims Act allows private citizens, called “relators,” to institute civil proceedings on behalf of the United States alleging violations of the False Claims Act. These lawsuits, also known as “whistleblower” or “ qui tam ” actions, can involve significant monetary damages, fines, attorneys’ fees and the award of bounties to the relators who successfully prosecute or bring these suits to the government. Qui tam cases are sealed at the time of filing, which means knowledge of the information contained in the complaint typically is limited to the relator, the federal government, and the presiding court. The defendant in a qui tam action may remain unaware of the existence of a sealed complaint for years. While the complaint is under seal, the government reviews the merits of the case and may conduct a broad investigation and seek discovery from the defendant and other parties before deciding whether to intervene in the case and take the lead on litigating the claims. The court lifts the seal when the government makes its decision on whether to intervene. If the government decides not to intervene, the relator may elect to continue to pursue the lawsuit individually on behalf of the government. It is possible that qui tam lawsuits have been filed against us, which suits remain under seal, or that we are unaware of such filings or precluded by existing law or court order from discussing or disclosing the filing of such suits. We may be subject to liability under one or more undisclosed qui tam cases brought pursuant to the False Claims Act. It is our obligation as a participant in Medicare and other federal healthcare programs to routinely conduct audits and reviews of the accuracy of our billing systems and other regulatory compliance matters. As a result of these reviews, we have made, and will continue to make, disclosures to the United States Department of Health and Human Services Office of Inspector General and CMS relating to amounts we suspect represent over-payments from these programs, whether due to inaccurate billing or otherwise. Some of these disclosures have resulted in, or may result in, Encompass Health refunding amounts to Medicare or other federal healthcare programs. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our internal financial reporting and management structure is focused on the major types of services provided by Encompass Health. We manage our operations using two operating segments which are also our reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. These reportable operating segments are consistent with information used by our chief executive officer, who is our chief operating decision maker, to assess performance and allocate resources. The following is a brief description of our reportable segments: • Inpatient Rehabilitation - Our national network of inpatient rehabilitation hospitals stretches across 33 states and Puerto Rico, with a concentration of hospitals in the eastern half of the United States and Texas. As of March 31, 2020 , we operate 134 inpatient rehabilitation hospitals. We are the sole owner of 87 of these hospitals. We retain 50.0% to 97.5% ownership in the remaining 47 jointly owned hospitals. In addition, we manage three inpatient rehabilitation units through management contracts. We provide specialized rehabilitative treatment on both an inpatient and outpatient basis. Our inpatient rehabilitation hospitals provide a higher level of rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders, cardiac and pulmonary conditions, brain and spinal cord injuries, complex orthopedic conditions, and amputations. • Home Health and Hospice - As of March 31, 2020 , we provide home health services in 245 locations and hospice services in 83 locations across 31 states with concentrations in the Southeast and Texas. In addition, one of these home health agencies operates as a joint venture which we account for using the equity method of accounting. We are the sole owner of 320 of these locations. We retain 50.0% to 81.0% ownership in the remaining eight jointly owned locations. Our home health services include a comprehensive range of Medicare-certified home nursing services to adult patients in need of care. These services include, among others, skilled nursing, physical, occupational, and speech therapy, medical social work, and home health aide services. Our hospice services include in-home services to terminally ill patients and their families to address patients’ physical needs, including pain control and symptom management, and to provide emotional and spiritual support. The accounting policies of our reportable segments are the same as those described in Note 1, Summary of Significant Accounting Policies , to the consolidated financial statements accompanying the 2019 Form 10‑K . All revenues for our services are generated through external customers. See Note 1 , Basis of Presentation , “Net Operating Revenues,” for the disaggregation of our revenues. No corporate overhead is allocated to either of our reportable segments. Our chief operating decision maker evaluates the performance of our segments and allocates resources to them based on adjusted earnings before interest, taxes, depreciation, and amortization (“Segment Adjusted EBITDA”). Selected financial information for our reportable segments is as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Net operating revenues $ 909.2 $ 870.1 $ 272.8 $ 253.9 Operating expenses: Inpatient rehabilitation: Salaries and benefits 482.3 445.0 — — Other operating expenses 134.7 127.6 — — Supplies 39.6 35.6 — — Occupancy costs 15.3 15.8 — — Home health and hospice: Cost of services sold (excluding depreciation and amortization) — — 130.9 116.5 Support and overhead costs — — 100.2 88.8 671.9 624.0 231.1 205.3 Other expense (income) 1.6 (2.8 ) — — Equity in net income of nonconsolidated affiliates (0.6 ) (2.1 ) (0.2 ) (0.4 ) Noncontrolling interests 20.8 21.0 0.9 2.7 Segment Adjusted EBITDA $ 215.5 $ 230.0 $ 41.0 $ 46.3 Capital expenditures $ 83.3 $ 70.4 $ 1.5 $ 4.5 Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of March 31, 2020 Total assets $ 4,558.8 $ 1,639.2 $ 6,137.7 Investments in and advances to nonconsolidated affiliates 1.8 3.9 5.7 As of December 31, 2019 Total assets $ 4,501.4 $ 1,612.8 $ 6,080.7 Investments in and advances to nonconsolidated affiliates 2.0 5.4 7.4 Segment reconciliations (in millions): Three Months Ended March 31, 2020 2019 Total Segment Adjusted EBITDA $ 256.5 $ 276.3 General and administrative expenses (35.6 ) (53.4 ) Depreciation and amortization (58.8 ) (52.5 ) Loss on disposal of assets (0.1 ) (1.1 ) Government, class action, and related settlements (2.8 ) — Interest expense and amortization of debt discounts and fees (43.2 ) (37.2 ) Net income attributable to noncontrolling interests 21.7 22.9 SARs mark-to-market impact on noncontrolling interests — 0.8 Change in fair market value of equity securities (2.5 ) 0.9 Gain on consolidation of Treasure Coast 2.2 — Payroll taxes on SARs exercise (1.5 ) (0.2 ) Income from continuing operations before income tax expense $ 135.9 $ 156.5 March 31, 2020 December 31, 2019 Total assets for reportable segments $ 6,198.0 $ 6,114.2 Reclassification of deferred income tax liabilities to net deferred income tax assets (60.3 ) (33.5 ) Total consolidated assets $ 6,137.7 $ 6,080.7 Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended March 31, 2020 2019 Inpatient rehabilitation: Inpatient $ 890.0 $ 847.6 Outpatient and other 19.2 22.5 Total inpatient rehabilitation 909.2 870.1 Home health and hospice: Home health 224.8 219.5 Hospice 48.0 34.4 Total home health and hospice 272.8 253.9 Total net operating revenues $ 1,182.0 $ 1,124.0 |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 3 Months Ended |
Mar. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X, Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” Each of the subsidiary guarantors is 100% owned by Encompass Health. Those subsidiary guarantors guarantee the indebtedness under our credit agreement and our senior unsecured notes, and all guarantees are full and unconditional and joint and several, subject to certain customary conditions for release. Encompass Health’s investments in its consolidated subsidiaries, as well as guarantor subsidiaries’ investments in nonguarantor subsidiaries and nonguarantor subsidiaries’ investments in guarantor subsidiaries, are presented under the equity method of accounting with the related investment presented within the line items Intercompany receivable and investments in consolidated affiliates and Intercompany payable in the accompanying condensed consolidating balance sheets. The terms of our credit agreement allow us to declare and pay cash dividends on our common stock so long as: (1) we are not in default under our credit agreement, (2) our senior secured leverage ratio (as defined in our credit agreement) remains less than or equal to 2 x, and (3) our leverage ratio (as defined in our credit agreement) remains less than or equal to 4.5x. The terms of our senior note indenture allow us to declare and pay cash dividends on our common stock so long as (1) we are not in default, (2) the consolidated coverage ratio (as defined in the indenture) exceeds 2 x or we are otherwise allowed under the indenture to incur debt, and (3) we have capacity under the indenture’s restricted payments covenant to declare and pay dividends. See Note 10, Long-term Debt , to the consolidated financial statements accompanying the 2019 Form 10‑K . Periodically, certain wholly owned subsidiaries of Encompass Health make dividends or distributions of available cash and/or intercompany receivable balances to their parents. In addition, Encompass Health makes contributions to certain wholly owned subsidiaries. When made, these dividends, distributions, and contributions impact the Intercompany receivable and investments in consolidated affiliates , Intercompany payable , and Encompass Health shareholders’ equity line items in the accompanying condensed consolidating balance sheet but have no impact on the consolidated financial statements of Encompass Health Corporation. Three Months Ended March 31, 2020 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 4.6 $ 622.5 $ 323.3 $ 266.8 $ (35.2 ) $ 1,182.0 Operating expenses: Salaries and benefits 16.7 309.8 164.2 193.3 (4.9 ) 679.1 Other operating expenses 9.6 86.9 52.0 24.1 (13.0 ) 159.6 Occupancy costs 0.6 25.4 6.7 4.8 (17.3 ) 20.2 Supplies — 26.5 13.2 6.0 — 45.7 General and administrative expenses 34.7 — — 0.9 — 35.6 Depreciation and amortization 5.3 28.7 15.0 9.8 — 58.8 Government, class action, and related settlements 2.8 — — — — 2.8 Total operating expenses 69.7 477.3 251.1 238.9 (35.2 ) 1,001.8 Interest expense and amortization of debt discounts and fees 35.8 6.3 1.4 4.9 (5.2 ) 43.2 Other (income) expense (2.3 ) (0.4 ) 1.6 (2.2 ) 5.2 1.9 Equity in net income of nonconsolidated affiliates — (0.5 ) (0.1 ) (0.2 ) — (0.8 ) Equity in net income of consolidated affiliates (122.2 ) (17.8 ) — — 140.0 — Management fees (42.0 ) 30.2 11.8 — — — Income from continuing operations before income tax (benefit) expense 65.6 127.4 57.5 25.4 (140.0 ) 135.9 Provision for income tax (benefit) expense (21.5 ) 33.0 9.1 6.5 — 27.1 Income from continuing operations 87.1 94.4 48.4 18.9 (140.0 ) 108.8 Loss from discontinued operations, net of tax (0.1 ) — — — — (0.1 ) Net and comprehensive income 87.0 94.4 48.4 18.9 (140.0 ) 108.7 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.2 ) (0.5 ) — (21.7 ) Net and comprehensive income attributable to Encompass Health $ 87.0 $ 94.4 $ 27.2 $ 18.4 $ (140.0 ) $ 87.0 Three Months Ended March 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 5.1 $ 606.5 $ 296.5 $ 249.5 $ (33.6 ) $ 1,124.0 Operating expenses: Salaries and benefits 15.9 288.9 148.0 173.1 (5.1 ) 620.8 Other operating expenses 10.3 84.7 46.8 20.8 (12.5 ) 150.1 Occupancy costs 0.5 24.9 6.5 3.7 (16.0 ) 19.6 Supplies — 24.0 11.6 4.5 — 40.1 General and administrative expenses 39.9 — — 13.5 — 53.4 Depreciation and amortization 5.0 26.3 13.1 8.1 — 52.5 Total operating expenses 71.6 448.8 226.0 223.7 (33.6 ) 936.5 Interest expense and amortization of debt discounts and fees 30.1 6.2 1.3 6.4 (6.8 ) 37.2 Other income (7.7 ) (0.3 ) (2.5 ) — 6.8 (3.7 ) Equity in net income of nonconsolidated affiliates — (2.0 ) (0.1 ) (0.4 ) — (2.5 ) Equity in net income of consolidated affiliates (130.2 ) (17.1 ) — — 147.3 — Management fees (39.8 ) 29.5 10.3 — — — Income from continuing operations before income tax (benefit) expense 81.1 141.4 61.5 19.8 (147.3 ) 156.5 Provision for income tax (benefit) expense (21.7 ) 37.8 10.2 4.5 — 30.8 Income from continuing operations 102.8 103.6 51.3 15.3 (147.3 ) 125.7 Loss from discontinued operations, net of tax (0.5 ) — — — — (0.5 ) Net and comprehensive income 102.3 103.6 51.3 15.3 (147.3 ) 125.2 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.2 ) (1.7 ) — (22.9 ) Net and comprehensive income attributable to Encompass Health $ 102.3 $ 103.6 $ 30.1 $ 13.6 $ (147.3 ) $ 102.3 As of March 31, 2020 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 79.0 $ 3.7 $ 7.8 $ 14.4 $ — $ 104.9 Restricted cash — — 56.7 — — 56.7 Accounts receivable — 270.8 131.6 141.0 — 543.4 Other current assets 79.8 34.7 45.1 7.2 (87.3 ) 79.5 Total current assets 158.8 309.2 241.2 162.6 (87.3 ) 784.5 Property and equipment, net 138.5 1,268.0 567.4 29.4 — 2,003.3 Operating lease right-of-use assets 9.7 158.0 80.1 43.2 (23.1 ) 267.9 Goodwill — 912.2 329.0 1,070.9 — 2,312.1 Intangible assets, net 15.8 98.9 64.8 285.2 — 464.7 Deferred income tax assets 52.6 11.1 0.1 — (62.3 ) 1.5 Other long-term assets 51.7 86.8 152.9 12.3 — 303.7 Intercompany receivable and investments in consolidated affiliates 4,245.7 657.6 — 7.5 (4,910.8 ) — Total assets $ 4,672.8 $ 3,501.8 $ 1,435.5 $ 1,611.1 $ (5,083.5 ) $ 6,137.7 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 17.0 $ 10.8 $ 3.9 $ 8.5 $ — $ 40.2 Current operating lease liabilities 1.4 19.2 14.2 13.6 (7.6 ) 40.8 Accounts payable 12.5 57.2 25.0 3.3 — 98.0 Accrued expenses and other current liabilities 171.5 110.4 134.0 78.6 (87.3 ) 407.2 Total current liabilities 202.4 197.6 177.1 104.0 (94.9 ) 586.2 Long-term debt, net of current portion 2,973.0 302.5 40.6 5.8 — 3,321.9 Long-term operating lease liabilities 8.6 143.5 69.1 29.6 (15.7 ) 235.1 Other long-term liabilities 44.9 12.0 105.0 63.6 (62.2 ) 163.3 Intercompany payable — — 66.0 — (66.0 ) — 3,228.9 655.6 457.8 203.0 (238.8 ) 4,306.5 Commitments and contingencies Redeemable noncontrolling interests — — 34.0 — — 34.0 Shareholders’ equity: Encompass Health shareholders’ equity 1,443.9 2,846.2 590.4 1,408.1 (4,844.7 ) 1,443.9 Noncontrolling interests — — 353.3 — — 353.3 Total shareholders’ equity 1,443.9 2,846.2 943.7 1,408.1 (4,844.7 ) 1,797.2 Total liabilities and shareholders’ equity $ 4,672.8 $ 3,501.8 $ 1,435.5 $ 1,611.1 $ (5,083.5 ) $ 6,137.7 As of December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash — — 57.4 — — 57.4 Accounts receivable — 280.4 125.6 100.1 — 506.1 Other current assets 64.3 35.4 9.3 7.8 (19.3 ) 97.5 Total current assets 118.0 321.0 198.3 137.8 (19.3 ) 755.8 Property and equipment, net 133.4 1,246.0 551.2 28.7 — 1,959.3 Operating lease right-of-use assets 10.1 171.5 86.5 43.7 (35.3 ) 276.5 Goodwill — 912.2 323.0 1,070.0 — 2,305.2 Intangible assets, net 17.7 101.7 65.3 291.6 — 476.3 Deferred income tax assets 27.2 11.1 0.1 — (35.5 ) 2.9 Other long-term assets 53.6 85.4 151.6 14.1 — 304.7 Intercompany notes receivable 737.8 — — — (737.8 ) — Intercompany receivable and investments in consolidated affiliates 3,155.4 523.6 — — (3,679.0 ) — Total assets $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 17.0 $ 10.4 $ 3.8 $ 8.1 $ — $ 39.3 Current operating lease liabilities 1.3 21.9 16.0 12.1 (10.9 ) 40.4 Accounts payable 9.8 56.5 24.3 4.0 — 94.6 Accrued expenses and other current liabilities 147.4 108.7 109.2 200.7 (19.3 ) 546.7 Total current liabilities 175.5 197.5 153.3 224.9 (30.2 ) 721.0 Long-term debt, net of current portion 2,670.6 305.4 41.6 5.7 — 3,023.3 Long-term operating lease liabilities 9.0 153.9 73.6 31.9 (24.6 ) 243.8 Intercompany notes payable — — — 737.8 (737.8 ) — Other long-term liabilities 45.9 12.2 100.3 37.0 (35.5 ) 159.9 Intercompany payable — — 66.0 4.4 (70.4 ) — 2,901.0 669.0 434.8 1,041.7 (898.5 ) 4,148.0 Commitments and contingencies Redeemable noncontrolling interests — — 31.4 208.2 — 239.6 Shareholders’ equity: Encompass Health shareholders’ equity 1,352.2 2,703.5 568.9 336.0 (3,608.4 ) 1,352.2 Noncontrolling interests — — 340.9 — — 340.9 Total shareholders’ equity 1,352.2 2,703.5 909.8 336.0 (3,608.4 ) 1,693.1 Total liabilities and shareholders’ equity $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 Three Months Ended March 31, 2020 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (31.2 ) $ 117.7 $ 56.8 $ (114.0 ) $ — $ 29.3 Cash flows from investing activities: Purchases of property and equipment (9.3 ) (49.5 ) (23.4 ) (1.3 ) — (83.5 ) Acquisitions of businesses, net of cash acquired — — — (1.1 ) — (1.1 ) Funding of intercompany note receivable (15.0 ) — — — 15.0 — Other, net (2.8 ) 0.7 3.9 (0.2 ) — 1.6 Net cash used in investing activities (27.1 ) (48.8 ) (19.5 ) (2.6 ) 15.0 (83.0 ) Cash flows from financing activities: Principal borrowings on intercompany note payable — — — 15.0 (15.0 ) — Borrowings on revolving credit facility 330.0 — — — — 330.0 Payments on revolving credit facility (25.0 ) — — — — (25.0 ) Dividends paid on common stock (28.9 ) — — (0.1 ) — (29.0 ) Purchase of equity interests in consolidated affiliates (162.3 ) — — — — (162.3 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (19.1 ) — — (19.1 ) Taxes paid on behalf of employees for shares withheld (14.6 ) — — (1.0 ) — (15.6 ) Other, net (8.5 ) (2.5 ) 5.0 (1.9 ) — (7.9 ) Change in intercompany advances (7.1 ) (67.9 ) (14.1 ) 89.1 — — Net cash provided by (used in) financing activities 83.6 (70.4 ) (28.2 ) 101.1 (15.0 ) 71.1 Increase (decrease) in cash, cash equivalents, and restricted cash 25.3 (1.5 ) 9.1 (15.5 ) — 17.4 Cash, cash equivalents, and restricted cash at beginning of period 53.7 5.2 70.8 29.9 — 159.6 Cash, cash equivalents, and restricted cash at end of period $ 79.0 $ 3.7 $ 79.9 $ 14.4 $ — $ 177.0 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash at beginning of period — — 57.4 — — 57.4 Restricted cash included in other long term assets at beginning of period — — 7.4 — — 7.4 Cash, cash equivalents, and restricted cash at beginning of period $ 53.7 $ 5.2 $ 70.8 $ 29.9 $ — $ 159.6 Cash and cash equivalents at end of period $ 79.0 $ 3.7 $ 7.8 $ 14.4 $ — $ 104.9 Restricted cash at end of period — — 56.7 — — 56.7 Restricted cash included in other long-term assets at end of period — — 15.4 — — 15.4 Cash, cash equivalents, and restricted cash at end of period $ 79.0 $ 3.7 $ 79.9 $ 14.4 $ — $ 177.0 Supplemental schedule of noncash financing activity: Capital contribution of intercompany note $ 853.0 $ — $ — (853.0 ) $ — $ — Three Months Ended March 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash provided by operating activities $ 18.6 $ 89.6 $ 42.4 $ 9.3 $ — $ 159.9 Cash flows from investing activities: Purchases of property and equipment (6.8 ) (32.5 ) (29.4 ) (3.6 ) — (72.3 ) Acquisitions of businesses, net of cash acquired — — — (13.7 ) — (13.7 ) Funding of intercompany note receivable (8.0 ) — — — 8.0 — Proceeds from repayment of intercompany note receivable 5.0 — — — (5.0 ) — Other, net (4.0 ) (0.1 ) (0.7 ) (0.7 ) — (5.5 ) Net cash used in investing activities (13.8 ) (32.6 ) (30.1 ) (18.0 ) 3.0 (91.5 ) Cash flows from financing activities: Principal borrowings on intercompany note payable — — — 8.0 (8.0 ) — Principal payments on intercompany note payable — — — (5.0 ) 5.0 — Borrowings on revolving credit facility 25.0 — — — — 25.0 Payments on revolving credit facility (30.0 ) — — — — (30.0 ) Dividends paid on common stock (28.2 ) — (0.1 ) — (28.3 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (19.5 ) — — (19.5 ) Taxes paid on behalf of employees for shares withheld (14.7 ) — — (1.2 ) — (15.9 ) Other, net (14.7 ) (2.1 ) 5.6 (1.8 ) — (13.0 ) Change in intercompany advances 51.0 (54.4 ) 2.1 1.3 — — Net cash used in financing activities (11.6 ) (56.5 ) (11.8 ) 1.2 (3.0 ) (81.7 ) (Decrease) increase in cash, cash equivalents, and restricted cash (6.8 ) 0.5 0.5 (7.5 ) — (13.3 ) Cash, cash equivalents, and restricted cash at beginning of period 41.5 3.0 69.4 19.6 — 133.5 Cash, cash equivalents, and restricted cash at end of period $ 34.7 $ 3.5 $ 69.9 $ 12.1 $ — $ 120.2 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash at beginning of period — — 59.0 — — 59.0 Long term restricted cash at beginning of period — — 5.3 — — 5.3 Cash, cash equivalents, and restricted cash at beginning of period $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Cash and cash equivalents at end of period $ 34.7 $ 3.5 $ 5.8 $ 12.1 $ — $ 56.1 Restricted cash at end of period — — 59.0 — — 59.0 Long term restricted cash at end of period — — 5.1 — — 5.1 Cash, cash equivalents, and restricted cash at end of period $ 34.7 $ 3.5 $ 69.9 $ 12.1 $ — $ 120.2 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326),” which provides guidance for accounting for credit losses on financial instruments. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance resulted in an immaterial change to our condensed consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement), by providing guidance in determining when the arrangement includes a software license. It requires entities to account for such costs consistent with the guidance on capitalizing costs associated with developing or obtaining internal-use software. The new guidance was effective for us beginning January 1, 2020. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted — In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance is effective for us beginning January 1, 2021, including interim periods within that reporting period. Early adoption is permitted. We continue to review the requirements of this standard and any potential impact it may have on our condensed consolidated financial statements. We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Concentration of Net Operating Revenues by Payor | Our Net operating revenues disaggregated by payor source and segment are as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Consolidated Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 2020 2019 Medicare $ 641.9 $ 638.9 $ 226.2 $ 214.8 $ 868.1 $ 853.7 Medicare Advantage 111.5 85.2 29.4 25.5 140.9 110.7 Managed care 90.2 83.5 12.1 8.4 102.3 91.9 Medicaid 30.7 26.2 4.2 4.3 34.9 30.5 Other third-party payors 11.0 10.0 — — 11.0 10.0 Workers’ compensation 6.9 8.2 0.3 0.2 7.2 8.4 Patients 5.5 6.1 0.4 0.4 5.9 6.5 Other income 11.5 12.0 0.2 0.3 11.7 12.3 Total $ 909.2 $ 870.1 $ 272.8 $ 253.9 $ 1,182.0 $ 1,124.0 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities | The carrying amounts and classifications of the consolidated VIEs’ assets and liabilities, which are included in our consolidated balance sheet, are as follows (in millions): March 31, 2020 December 31, 2019 Assets Current assets: Cash and cash equivalents $ 1.1 $ 0.2 Accounts receivable 31.3 29.3 Other current assets 7.7 6.4 Total current assets 40.1 35.9 Property and equipment, net 120.9 122.6 Operating lease right-of-use assets 5.8 6.0 Goodwill 19.2 15.9 Intangible assets, net 4.8 3.3 Other long-term assets 31.4 31.3 Total assets $ 222.2 $ 215.0 Liabilities Current liabilities: Current portion of long-term debt $ 0.9 $ 0.8 Current operating lease liabilities 1.5 1.4 Accounts payable 5.6 6.7 Accrued expenses and other current liabilities 16.6 17.0 Total current liabilities 24.6 25.9 Long-term debt, net of current portion 10.3 10.5 Long-term operating lease liabilities 4.4 4.7 Total liabilities $ 39.3 $ 41.1 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Long-term Debt | Our long-term debt outstanding consists of the following (in millions): March 31, 2020 December 31, 2019 Credit Agreement— Advances under revolving credit facility $ 350.0 $ 45.0 Term loan facilities 261.9 265.2 Bonds payable— 5.125% Senior Notes due 2023 297.5 297.3 5.75% Senior Notes due 2024 697.5 697.3 5.75% Senior Notes due 2025 345.8 345.6 4.50% Senior Notes due 2028 491.9 491.7 4.75% Senior Notes due 2030 491.8 491.7 Other notes payable 44.5 44.7 Finance lease obligations 381.2 384.1 3,362.1 3,062.6 Less: Current portion (40.2 ) (39.3 ) Long-term debt, net of current portion $ 3,321.9 $ 3,023.3 |
Schedule of Financial Covenants | Fiscal Quarters Ending Interest Coverage Ratio December 31, 2019 and March 31, 2020 3.00 to 1.00 June 30, 2020, September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 2.00 to 1.00 March 31, 2022 and thereafter 3.00 to 1.00 Fiscal Quarters Ending Leverage Ratio December 31, 2019 and March 31, 2020 4.50 to 1.00 June 30, 2020 4.75 to 1.00 September 30, 2020 5.50 to 1.00 December 31, 2020 6.50 to 1.00 March 31, 2021 6.50 to 1.00 June 30, 2021 6.00 to 1.00 September 30, 2021 5.50 to 1.00 December 31, 2021 5.00 to 1.00 March 31, 2022 and thereafter 4.25 to 1.00 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests Activity | The following is a summary of the activity related to our Redeemable noncontrolling interests during the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 2019 Balance at beginning of period $ 239.6 $ 261.7 Net income attributable to noncontrolling interests 2.0 4.0 Distributions declared (2.1 ) (1.8 ) Contribution to joint venture 3.1 — Reclassification to noncontrolling interests — (11.2 ) Purchase of redeemable noncontrolling interests (162.3 ) — Exchange transaction (46.3 ) — Change in fair value — 20.3 Balance at end of period $ 34.0 $ 273.0 |
Reconciliation of Noncontrolling Interests | The following table reconciles the net income attributable to nonredeemable Noncontrolling interests , as recorded in the shareholders’ equity section of the condensed consolidated balance sheets, and the net income attributable to Redeemable noncontrolling interests , as recorded in the mezzanine section of the condensed consolidated balance sheets, to the Net and comprehensive income attributable to noncontrolling interests presented in the condensed consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019 (in millions): Three Months Ended March 31, 2020 2019 Net income attributable to nonredeemable noncontrolling interests $ 19.7 $ 18.9 Net income attributable to redeemable noncontrolling interests 2.0 4.0 Net income attributable to noncontrolling interests $ 21.7 $ 22.9 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis | Our financial assets and liabilities that are measured at fair value on a recurring basis are as follows (in millions): Fair Value Measurements at Reporting Date Using As of March 31, 2020 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Valuation Technique (1) Other long-term assets: Equity securities $ 61.8 $ — $ 61.8 $ — M Debt securities 9.4 9.4 — — M Redeemable noncontrolling interests 34.0 — — 34.0 I As of December 31, 2019 Other long-term assets: Equity securities $ 63.5 $ — $ 63.5 $ — M Debt securities 12.6 12.6 — — M Redeemable noncontrolling interests 239.6 — — 239.6 I (1) The three valuation techniques are: market approach (M), cost approach (C), and income approach (I). |
Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments | The carrying amounts and estimated fair values for all of our other financial instruments are presented in the following table (in millions): As of March 31, 2020 As of December 31, 2019 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Long-term debt: Advances under revolving credit facility $ 350.0 $ 350.0 $ 45.0 $ 45.0 Term loan facilities 261.9 263.3 265.2 266.6 5.125% Senior Notes due 2023 297.5 298.5 297.3 306.6 5.75% Senior Notes due 2024 697.5 703.5 697.3 708.8 5.75% Senior Notes due 2025 345.8 344.3 345.6 369.7 4.50% Senior Notes due 2028 491.9 491.3 491.7 519.4 4.75% Senior Notes due 2030 491.8 496.1 491.7 520.0 Other notes payable 44.5 44.5 44.7 44.7 Financial commitments: Letters of credit — 36.7 — 38.9 |
Earnings per Common Share (Tabl
Earnings per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share (in millions, except per share amounts): Three Months Ended March 31, 2020 2019 Basic: Numerator: Income from continuing operations $ 108.8 $ 125.7 Less: Net income attributable to noncontrolling interests included in continuing operations (21.7 ) (22.9 ) Less: Income allocated to participating securities (0.3 ) (0.4 ) Income from continuing operations attributable to Encompass Health common shareholders 86.8 102.4 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) (0.5 ) Net income attributable to Encompass Health common shareholders $ 86.7 $ 101.9 Denominator: Basic weighted average common shares outstanding 98.2 98.4 Basic earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.88 $ 1.05 Discontinued operations — (0.01 ) Net income $ 0.88 $ 1.04 Diluted: Numerator: Income from continuing operations $ 108.8 $ 125.7 Less: Net income attributable to noncontrolling interests included in continuing operations (21.7 ) (22.9 ) Income from continuing operations attributable to Encompass Health common shareholders 87.1 102.8 Loss from discontinued operations, net of tax, attributable to Encompass Health common shareholders (0.1 ) (0.5 ) Net income attributable to Encompass Health common shareholders $ 87.0 $ 102.3 Denominator: Diluted weighted average common shares outstanding 99.6 99.7 Diluted earnings per share attributable to Encompass Health common shareholders: Continuing operations $ 0.87 $ 1.04 Discontinued operations — (0.01 ) Net income $ 0.87 $ 1.03 |
Reconciliation of Weighted Average Number of Shares Outstanding | The following table sets forth the reconciliation between basic weighted average common shares outstanding and diluted weighted average common shares outstanding (in millions): Three Months Ended March 31, 2020 2019 Basic weighted average common shares outstanding 98.2 98.4 Restricted stock awards, dilutive stock options, and restricted stock units 1.4 1.3 Diluted weighted average common shares outstanding 99.6 99.7 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Selected financial information for our reportable segments is as follows (in millions): Inpatient Rehabilitation Home Health and Hospice Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Net operating revenues $ 909.2 $ 870.1 $ 272.8 $ 253.9 Operating expenses: Inpatient rehabilitation: Salaries and benefits 482.3 445.0 — — Other operating expenses 134.7 127.6 — — Supplies 39.6 35.6 — — Occupancy costs 15.3 15.8 — — Home health and hospice: Cost of services sold (excluding depreciation and amortization) — — 130.9 116.5 Support and overhead costs — — 100.2 88.8 671.9 624.0 231.1 205.3 Other expense (income) 1.6 (2.8 ) — — Equity in net income of nonconsolidated affiliates (0.6 ) (2.1 ) (0.2 ) (0.4 ) Noncontrolling interests 20.8 21.0 0.9 2.7 Segment Adjusted EBITDA $ 215.5 $ 230.0 $ 41.0 $ 46.3 Capital expenditures $ 83.3 $ 70.4 $ 1.5 $ 4.5 |
Reconciliation of Assets from Segment to Consolidated | March 31, 2020 December 31, 2019 Total assets for reportable segments $ 6,198.0 $ 6,114.2 Reclassification of deferred income tax liabilities to net deferred income tax assets (60.3 ) (33.5 ) Total consolidated assets $ 6,137.7 $ 6,080.7 Inpatient Rehabilitation Home Health and Hospice Encompass Health Consolidated As of March 31, 2020 Total assets $ 4,558.8 $ 1,639.2 $ 6,137.7 Investments in and advances to nonconsolidated affiliates 1.8 3.9 5.7 As of December 31, 2019 Total assets $ 4,501.4 $ 1,612.8 $ 6,080.7 Investments in and advances to nonconsolidated affiliates 2.0 5.4 7.4 |
Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense | Segment reconciliations (in millions): Three Months Ended March 31, 2020 2019 Total Segment Adjusted EBITDA $ 256.5 $ 276.3 General and administrative expenses (35.6 ) (53.4 ) Depreciation and amortization (58.8 ) (52.5 ) Loss on disposal of assets (0.1 ) (1.1 ) Government, class action, and related settlements (2.8 ) — Interest expense and amortization of debt discounts and fees (43.2 ) (37.2 ) Net income attributable to noncontrolling interests 21.7 22.9 SARs mark-to-market impact on noncontrolling interests — 0.8 Change in fair market value of equity securities (2.5 ) 0.9 Gain on consolidation of Treasure Coast 2.2 — Payroll taxes on SARs exercise (1.5 ) (0.2 ) Income from continuing operations before income tax expense $ 135.9 $ 156.5 |
Reconciliation of Revenue from Segments to Consolidated | Additional detail regarding the revenues of our operating segments by service line follows (in millions): Three Months Ended March 31, 2020 2019 Inpatient rehabilitation: Inpatient $ 890.0 $ 847.6 Outpatient and other 19.2 22.5 Total inpatient rehabilitation 909.2 870.1 Home health and hospice: Home health 224.8 219.5 Hospice 48.0 34.4 Total home health and hospice 272.8 253.9 Total net operating revenues $ 1,182.0 $ 1,124.0 |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Statement of Income | Three Months Ended March 31, 2020 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 4.6 $ 622.5 $ 323.3 $ 266.8 $ (35.2 ) $ 1,182.0 Operating expenses: Salaries and benefits 16.7 309.8 164.2 193.3 (4.9 ) 679.1 Other operating expenses 9.6 86.9 52.0 24.1 (13.0 ) 159.6 Occupancy costs 0.6 25.4 6.7 4.8 (17.3 ) 20.2 Supplies — 26.5 13.2 6.0 — 45.7 General and administrative expenses 34.7 — — 0.9 — 35.6 Depreciation and amortization 5.3 28.7 15.0 9.8 — 58.8 Government, class action, and related settlements 2.8 — — — — 2.8 Total operating expenses 69.7 477.3 251.1 238.9 (35.2 ) 1,001.8 Interest expense and amortization of debt discounts and fees 35.8 6.3 1.4 4.9 (5.2 ) 43.2 Other (income) expense (2.3 ) (0.4 ) 1.6 (2.2 ) 5.2 1.9 Equity in net income of nonconsolidated affiliates — (0.5 ) (0.1 ) (0.2 ) — (0.8 ) Equity in net income of consolidated affiliates (122.2 ) (17.8 ) — — 140.0 — Management fees (42.0 ) 30.2 11.8 — — — Income from continuing operations before income tax (benefit) expense 65.6 127.4 57.5 25.4 (140.0 ) 135.9 Provision for income tax (benefit) expense (21.5 ) 33.0 9.1 6.5 — 27.1 Income from continuing operations 87.1 94.4 48.4 18.9 (140.0 ) 108.8 Loss from discontinued operations, net of tax (0.1 ) — — — — (0.1 ) Net and comprehensive income 87.0 94.4 48.4 18.9 (140.0 ) 108.7 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.2 ) (0.5 ) — (21.7 ) Net and comprehensive income attributable to Encompass Health $ 87.0 $ 94.4 $ 27.2 $ 18.4 $ (140.0 ) $ 87.0 Three Months Ended March 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 5.1 $ 606.5 $ 296.5 $ 249.5 $ (33.6 ) $ 1,124.0 Operating expenses: Salaries and benefits 15.9 288.9 148.0 173.1 (5.1 ) 620.8 Other operating expenses 10.3 84.7 46.8 20.8 (12.5 ) 150.1 Occupancy costs 0.5 24.9 6.5 3.7 (16.0 ) 19.6 Supplies — 24.0 11.6 4.5 — 40.1 General and administrative expenses 39.9 — — 13.5 — 53.4 Depreciation and amortization 5.0 26.3 13.1 8.1 — 52.5 Total operating expenses 71.6 448.8 226.0 223.7 (33.6 ) 936.5 Interest expense and amortization of debt discounts and fees 30.1 6.2 1.3 6.4 (6.8 ) 37.2 Other income (7.7 ) (0.3 ) (2.5 ) — 6.8 (3.7 ) Equity in net income of nonconsolidated affiliates — (2.0 ) (0.1 ) (0.4 ) — (2.5 ) Equity in net income of consolidated affiliates (130.2 ) (17.1 ) — — 147.3 — Management fees (39.8 ) 29.5 10.3 — — — Income from continuing operations before income tax (benefit) expense 81.1 141.4 61.5 19.8 (147.3 ) 156.5 Provision for income tax (benefit) expense (21.7 ) 37.8 10.2 4.5 — 30.8 Income from continuing operations 102.8 103.6 51.3 15.3 (147.3 ) 125.7 Loss from discontinued operations, net of tax (0.5 ) — — — — (0.5 ) Net and comprehensive income 102.3 103.6 51.3 15.3 (147.3 ) 125.2 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.2 ) (1.7 ) — (22.9 ) Net and comprehensive income attributable to Encompass Health $ 102.3 $ 103.6 $ 30.1 $ 13.6 $ (147.3 ) $ 102.3 |
Condensed Consolidating Statement of Comprehensive Income | Three Months Ended March 31, 2020 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 4.6 $ 622.5 $ 323.3 $ 266.8 $ (35.2 ) $ 1,182.0 Operating expenses: Salaries and benefits 16.7 309.8 164.2 193.3 (4.9 ) 679.1 Other operating expenses 9.6 86.9 52.0 24.1 (13.0 ) 159.6 Occupancy costs 0.6 25.4 6.7 4.8 (17.3 ) 20.2 Supplies — 26.5 13.2 6.0 — 45.7 General and administrative expenses 34.7 — — 0.9 — 35.6 Depreciation and amortization 5.3 28.7 15.0 9.8 — 58.8 Government, class action, and related settlements 2.8 — — — — 2.8 Total operating expenses 69.7 477.3 251.1 238.9 (35.2 ) 1,001.8 Interest expense and amortization of debt discounts and fees 35.8 6.3 1.4 4.9 (5.2 ) 43.2 Other (income) expense (2.3 ) (0.4 ) 1.6 (2.2 ) 5.2 1.9 Equity in net income of nonconsolidated affiliates — (0.5 ) (0.1 ) (0.2 ) — (0.8 ) Equity in net income of consolidated affiliates (122.2 ) (17.8 ) — — 140.0 — Management fees (42.0 ) 30.2 11.8 — — — Income from continuing operations before income tax (benefit) expense 65.6 127.4 57.5 25.4 (140.0 ) 135.9 Provision for income tax (benefit) expense (21.5 ) 33.0 9.1 6.5 — 27.1 Income from continuing operations 87.1 94.4 48.4 18.9 (140.0 ) 108.8 Loss from discontinued operations, net of tax (0.1 ) — — — — (0.1 ) Net and comprehensive income 87.0 94.4 48.4 18.9 (140.0 ) 108.7 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.2 ) (0.5 ) — (21.7 ) Net and comprehensive income attributable to Encompass Health $ 87.0 $ 94.4 $ 27.2 $ 18.4 $ (140.0 ) $ 87.0 Three Months Ended March 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net operating revenues $ 5.1 $ 606.5 $ 296.5 $ 249.5 $ (33.6 ) $ 1,124.0 Operating expenses: Salaries and benefits 15.9 288.9 148.0 173.1 (5.1 ) 620.8 Other operating expenses 10.3 84.7 46.8 20.8 (12.5 ) 150.1 Occupancy costs 0.5 24.9 6.5 3.7 (16.0 ) 19.6 Supplies — 24.0 11.6 4.5 — 40.1 General and administrative expenses 39.9 — — 13.5 — 53.4 Depreciation and amortization 5.0 26.3 13.1 8.1 — 52.5 Total operating expenses 71.6 448.8 226.0 223.7 (33.6 ) 936.5 Interest expense and amortization of debt discounts and fees 30.1 6.2 1.3 6.4 (6.8 ) 37.2 Other income (7.7 ) (0.3 ) (2.5 ) — 6.8 (3.7 ) Equity in net income of nonconsolidated affiliates — (2.0 ) (0.1 ) (0.4 ) — (2.5 ) Equity in net income of consolidated affiliates (130.2 ) (17.1 ) — — 147.3 — Management fees (39.8 ) 29.5 10.3 — — — Income from continuing operations before income tax (benefit) expense 81.1 141.4 61.5 19.8 (147.3 ) 156.5 Provision for income tax (benefit) expense (21.7 ) 37.8 10.2 4.5 — 30.8 Income from continuing operations 102.8 103.6 51.3 15.3 (147.3 ) 125.7 Loss from discontinued operations, net of tax (0.5 ) — — — — (0.5 ) Net and comprehensive income 102.3 103.6 51.3 15.3 (147.3 ) 125.2 Less: Net and comprehensive income attributable to noncontrolling interests — — (21.2 ) (1.7 ) — (22.9 ) Net and comprehensive income attributable to Encompass Health $ 102.3 $ 103.6 $ 30.1 $ 13.6 $ (147.3 ) $ 102.3 |
Condensed Consolidating Balance Sheet | As of March 31, 2020 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 79.0 $ 3.7 $ 7.8 $ 14.4 $ — $ 104.9 Restricted cash — — 56.7 — — 56.7 Accounts receivable — 270.8 131.6 141.0 — 543.4 Other current assets 79.8 34.7 45.1 7.2 (87.3 ) 79.5 Total current assets 158.8 309.2 241.2 162.6 (87.3 ) 784.5 Property and equipment, net 138.5 1,268.0 567.4 29.4 — 2,003.3 Operating lease right-of-use assets 9.7 158.0 80.1 43.2 (23.1 ) 267.9 Goodwill — 912.2 329.0 1,070.9 — 2,312.1 Intangible assets, net 15.8 98.9 64.8 285.2 — 464.7 Deferred income tax assets 52.6 11.1 0.1 — (62.3 ) 1.5 Other long-term assets 51.7 86.8 152.9 12.3 — 303.7 Intercompany receivable and investments in consolidated affiliates 4,245.7 657.6 — 7.5 (4,910.8 ) — Total assets $ 4,672.8 $ 3,501.8 $ 1,435.5 $ 1,611.1 $ (5,083.5 ) $ 6,137.7 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 17.0 $ 10.8 $ 3.9 $ 8.5 $ — $ 40.2 Current operating lease liabilities 1.4 19.2 14.2 13.6 (7.6 ) 40.8 Accounts payable 12.5 57.2 25.0 3.3 — 98.0 Accrued expenses and other current liabilities 171.5 110.4 134.0 78.6 (87.3 ) 407.2 Total current liabilities 202.4 197.6 177.1 104.0 (94.9 ) 586.2 Long-term debt, net of current portion 2,973.0 302.5 40.6 5.8 — 3,321.9 Long-term operating lease liabilities 8.6 143.5 69.1 29.6 (15.7 ) 235.1 Other long-term liabilities 44.9 12.0 105.0 63.6 (62.2 ) 163.3 Intercompany payable — — 66.0 — (66.0 ) — 3,228.9 655.6 457.8 203.0 (238.8 ) 4,306.5 Commitments and contingencies Redeemable noncontrolling interests — — 34.0 — — 34.0 Shareholders’ equity: Encompass Health shareholders’ equity 1,443.9 2,846.2 590.4 1,408.1 (4,844.7 ) 1,443.9 Noncontrolling interests — — 353.3 — — 353.3 Total shareholders’ equity 1,443.9 2,846.2 943.7 1,408.1 (4,844.7 ) 1,797.2 Total liabilities and shareholders’ equity $ 4,672.8 $ 3,501.8 $ 1,435.5 $ 1,611.1 $ (5,083.5 ) $ 6,137.7 As of December 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Assets Current assets: Cash and cash equivalents $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash — — 57.4 — — 57.4 Accounts receivable — 280.4 125.6 100.1 — 506.1 Other current assets 64.3 35.4 9.3 7.8 (19.3 ) 97.5 Total current assets 118.0 321.0 198.3 137.8 (19.3 ) 755.8 Property and equipment, net 133.4 1,246.0 551.2 28.7 — 1,959.3 Operating lease right-of-use assets 10.1 171.5 86.5 43.7 (35.3 ) 276.5 Goodwill — 912.2 323.0 1,070.0 — 2,305.2 Intangible assets, net 17.7 101.7 65.3 291.6 — 476.3 Deferred income tax assets 27.2 11.1 0.1 — (35.5 ) 2.9 Other long-term assets 53.6 85.4 151.6 14.1 — 304.7 Intercompany notes receivable 737.8 — — — (737.8 ) — Intercompany receivable and investments in consolidated affiliates 3,155.4 523.6 — — (3,679.0 ) — Total assets $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 Liabilities and Shareholders’ Equity Current liabilities: Current portion of long-term debt $ 17.0 $ 10.4 $ 3.8 $ 8.1 $ — $ 39.3 Current operating lease liabilities 1.3 21.9 16.0 12.1 (10.9 ) 40.4 Accounts payable 9.8 56.5 24.3 4.0 — 94.6 Accrued expenses and other current liabilities 147.4 108.7 109.2 200.7 (19.3 ) 546.7 Total current liabilities 175.5 197.5 153.3 224.9 (30.2 ) 721.0 Long-term debt, net of current portion 2,670.6 305.4 41.6 5.7 — 3,023.3 Long-term operating lease liabilities 9.0 153.9 73.6 31.9 (24.6 ) 243.8 Intercompany notes payable — — — 737.8 (737.8 ) — Other long-term liabilities 45.9 12.2 100.3 37.0 (35.5 ) 159.9 Intercompany payable — — 66.0 4.4 (70.4 ) — 2,901.0 669.0 434.8 1,041.7 (898.5 ) 4,148.0 Commitments and contingencies Redeemable noncontrolling interests — — 31.4 208.2 — 239.6 Shareholders’ equity: Encompass Health shareholders’ equity 1,352.2 2,703.5 568.9 336.0 (3,608.4 ) 1,352.2 Noncontrolling interests — — 340.9 — — 340.9 Total shareholders’ equity 1,352.2 2,703.5 909.8 336.0 (3,608.4 ) 1,693.1 Total liabilities and shareholders’ equity $ 4,253.2 $ 3,372.5 $ 1,376.0 $ 1,585.9 $ (4,506.9 ) $ 6,080.7 |
Condensed Consolidating Statement of Cash Flows | Three Months Ended March 31, 2020 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash (used in) provided by operating activities $ (31.2 ) $ 117.7 $ 56.8 $ (114.0 ) $ — $ 29.3 Cash flows from investing activities: Purchases of property and equipment (9.3 ) (49.5 ) (23.4 ) (1.3 ) — (83.5 ) Acquisitions of businesses, net of cash acquired — — — (1.1 ) — (1.1 ) Funding of intercompany note receivable (15.0 ) — — — 15.0 — Other, net (2.8 ) 0.7 3.9 (0.2 ) — 1.6 Net cash used in investing activities (27.1 ) (48.8 ) (19.5 ) (2.6 ) 15.0 (83.0 ) Cash flows from financing activities: Principal borrowings on intercompany note payable — — — 15.0 (15.0 ) — Borrowings on revolving credit facility 330.0 — — — — 330.0 Payments on revolving credit facility (25.0 ) — — — — (25.0 ) Dividends paid on common stock (28.9 ) — — (0.1 ) — (29.0 ) Purchase of equity interests in consolidated affiliates (162.3 ) — — — — (162.3 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (19.1 ) — — (19.1 ) Taxes paid on behalf of employees for shares withheld (14.6 ) — — (1.0 ) — (15.6 ) Other, net (8.5 ) (2.5 ) 5.0 (1.9 ) — (7.9 ) Change in intercompany advances (7.1 ) (67.9 ) (14.1 ) 89.1 — — Net cash provided by (used in) financing activities 83.6 (70.4 ) (28.2 ) 101.1 (15.0 ) 71.1 Increase (decrease) in cash, cash equivalents, and restricted cash 25.3 (1.5 ) 9.1 (15.5 ) — 17.4 Cash, cash equivalents, and restricted cash at beginning of period 53.7 5.2 70.8 29.9 — 159.6 Cash, cash equivalents, and restricted cash at end of period $ 79.0 $ 3.7 $ 79.9 $ 14.4 $ — $ 177.0 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 53.7 $ 5.2 $ 6.0 $ 29.9 $ — $ 94.8 Restricted cash at beginning of period — — 57.4 — — 57.4 Restricted cash included in other long term assets at beginning of period — — 7.4 — — 7.4 Cash, cash equivalents, and restricted cash at beginning of period $ 53.7 $ 5.2 $ 70.8 $ 29.9 $ — $ 159.6 Cash and cash equivalents at end of period $ 79.0 $ 3.7 $ 7.8 $ 14.4 $ — $ 104.9 Restricted cash at end of period — — 56.7 — — 56.7 Restricted cash included in other long-term assets at end of period — — 15.4 — — 15.4 Cash, cash equivalents, and restricted cash at end of period $ 79.0 $ 3.7 $ 79.9 $ 14.4 $ — $ 177.0 Supplemental schedule of noncash financing activity: Capital contribution of intercompany note $ 853.0 $ — $ — (853.0 ) $ — $ — Three Months Ended March 31, 2019 Encompass Health Corporation Guarantor Subsidiaries Non-guarantor Subsidiaries Holdings Eliminating Entries Encompass Health Consolidated (In Millions) Net cash provided by operating activities $ 18.6 $ 89.6 $ 42.4 $ 9.3 $ — $ 159.9 Cash flows from investing activities: Purchases of property and equipment (6.8 ) (32.5 ) (29.4 ) (3.6 ) — (72.3 ) Acquisitions of businesses, net of cash acquired — — — (13.7 ) — (13.7 ) Funding of intercompany note receivable (8.0 ) — — — 8.0 — Proceeds from repayment of intercompany note receivable 5.0 — — — (5.0 ) — Other, net (4.0 ) (0.1 ) (0.7 ) (0.7 ) — (5.5 ) Net cash used in investing activities (13.8 ) (32.6 ) (30.1 ) (18.0 ) 3.0 (91.5 ) Cash flows from financing activities: Principal borrowings on intercompany note payable — — — 8.0 (8.0 ) — Principal payments on intercompany note payable — — — (5.0 ) 5.0 — Borrowings on revolving credit facility 25.0 — — — — 25.0 Payments on revolving credit facility (30.0 ) — — — — (30.0 ) Dividends paid on common stock (28.2 ) — (0.1 ) — (28.3 ) Distributions paid to noncontrolling interests of consolidated affiliates — — (19.5 ) — — (19.5 ) Taxes paid on behalf of employees for shares withheld (14.7 ) — — (1.2 ) — (15.9 ) Other, net (14.7 ) (2.1 ) 5.6 (1.8 ) — (13.0 ) Change in intercompany advances 51.0 (54.4 ) 2.1 1.3 — — Net cash used in financing activities (11.6 ) (56.5 ) (11.8 ) 1.2 (3.0 ) (81.7 ) (Decrease) increase in cash, cash equivalents, and restricted cash (6.8 ) 0.5 0.5 (7.5 ) — (13.3 ) Cash, cash equivalents, and restricted cash at beginning of period 41.5 3.0 69.4 19.6 — 133.5 Cash, cash equivalents, and restricted cash at end of period $ 34.7 $ 3.5 $ 69.9 $ 12.1 $ — $ 120.2 Reconciliation of Cash, Cash Equivalents, and Restricted Cash Cash and cash equivalents at beginning of period $ 41.5 $ 3.0 $ 5.1 $ 19.6 $ — $ 69.2 Restricted cash at beginning of period — — 59.0 — — 59.0 Long term restricted cash at beginning of period — — 5.3 — — 5.3 Cash, cash equivalents, and restricted cash at beginning of period $ 41.5 $ 3.0 $ 69.4 $ 19.6 $ — $ 133.5 Cash and cash equivalents at end of period $ 34.7 $ 3.5 $ 5.8 $ 12.1 $ — $ 56.1 Restricted cash at end of period — — 59.0 — — 59.0 Long term restricted cash at end of period — — 5.1 — — 5.1 Cash, cash equivalents, and restricted cash at end of period $ 34.7 $ 3.5 $ 69.9 $ 12.1 $ — $ 120.2 |
Basis of Presentation - Textual
Basis of Presentation - Textuals (Details) $ in Millions | May 11, 2020USD ($) | Mar. 31, 2020segmentstate |
Subsequent Event [Line Items] | ||
Number of states in which entity operates | state | 37 | |
Number of operating segments | segment | 2 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Cash proceeds from CARES Act relief fund | $ | $ 238 |
Basis of Presentation - Net Ope
Basis of Presentation - Net Operating Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | $ 1,182 | $ 1,124 |
Net operating revenues | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 1,182 | 1,124 |
Net operating revenues | Other income | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 11.7 | 12.3 |
Net operating revenues | Inpatient Rehabilitation | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 909.2 | 870.1 |
Net operating revenues | Inpatient Rehabilitation | Other income | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 11.5 | 12 |
Net operating revenues | Home Health and Hospice | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 272.8 | 253.9 |
Net operating revenues | Home Health and Hospice | Other income | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 0.2 | 0.3 |
Net operating revenues | Third-Party Payor | Medicare | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 868.1 | 853.7 |
Net operating revenues | Third-Party Payor | Medicare Advantage | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 140.9 | 110.7 |
Net operating revenues | Third-Party Payor | Managed care | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 102.3 | 91.9 |
Net operating revenues | Third-Party Payor | Medicaid | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 34.9 | 30.5 |
Net operating revenues | Third-Party Payor | Other third-party payors | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 11 | 10 |
Net operating revenues | Third-Party Payor | Workers’ compensation | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 7.2 | 8.4 |
Net operating revenues | Third-Party Payor | Inpatient Rehabilitation | Medicare | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 641.9 | 638.9 |
Net operating revenues | Third-Party Payor | Inpatient Rehabilitation | Medicare Advantage | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 111.5 | 85.2 |
Net operating revenues | Third-Party Payor | Inpatient Rehabilitation | Managed care | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 90.2 | 83.5 |
Net operating revenues | Third-Party Payor | Inpatient Rehabilitation | Medicaid | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 30.7 | 26.2 |
Net operating revenues | Third-Party Payor | Inpatient Rehabilitation | Other third-party payors | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 11 | 10 |
Net operating revenues | Third-Party Payor | Inpatient Rehabilitation | Workers’ compensation | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 6.9 | 8.2 |
Net operating revenues | Third-Party Payor | Home Health and Hospice | Medicare | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 226.2 | 214.8 |
Net operating revenues | Third-Party Payor | Home Health and Hospice | Medicare Advantage | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 29.4 | 25.5 |
Net operating revenues | Third-Party Payor | Home Health and Hospice | Managed care | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 12.1 | 8.4 |
Net operating revenues | Third-Party Payor | Home Health and Hospice | Medicaid | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 4.2 | 4.3 |
Net operating revenues | Third-Party Payor | Home Health and Hospice | Other third-party payors | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 0 | 0 |
Net operating revenues | Third-Party Payor | Home Health and Hospice | Workers’ compensation | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 0.3 | 0.2 |
Net operating revenues | Self-Pay | Patients | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 5.9 | 6.5 |
Net operating revenues | Self-Pay | Inpatient Rehabilitation | Patients | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | 5.5 | 6.1 |
Net operating revenues | Self-Pay | Home Health and Hospice | Patients | Payor Source | ||
Disaggregation of Revenue [Line Items] | ||
Net operating revenues | $ 0.4 | $ 0.4 |
Variable Interest Entities - Te
Variable Interest Entities - Textual (Details) - Consolidated VIEs - entity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | ||
Number of consolidated limited partnership-like entities | 9 | 8 |
Minimum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 50.00% | 50.00% |
Maximum | ||
Variable Interest Entity [Line Items] | ||
Ownership interest in consolidated entities (percent) | 75.00% | 75.00% |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Carrying Amounts and Classifications of VIE's Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Current assets: | |||||
Cash and cash equivalents | $ 104.9 | $ 94.8 | $ 56.1 | $ 69.2 | |
Accounts receivable | 543.4 | 506.1 | |||
Other current assets | 79.5 | 97.5 | |||
Total current assets | 784.5 | 755.8 | |||
Property and equipment, net | 2,003.3 | 1,959.3 | |||
Operating lease right-of-use assets | 267.9 | 276.5 | |||
Goodwill | 2,312.1 | 2,305.2 | |||
Intangible assets, net | 464.7 | 476.3 | |||
Other long-term assets | 303.7 | 304.7 | |||
Total assets | [1] | 6,137.7 | 6,080.7 | ||
Current liabilities: | |||||
Current portion of long-term debt | 40.2 | 39.3 | |||
Current operating lease liabilities | 40.8 | 40.4 | |||
Accounts payable | 98 | 94.6 | |||
Accrued expenses and other current liabilities | 407.2 | 546.7 | |||
Total current liabilities | 586.2 | 721 | |||
Long-term debt, net of current portion | 3,321.9 | 3,023.3 | |||
Long-term operating lease liabilities | 235.1 | 243.8 | |||
Total liabilities | 4,306.5 | 4,148 | |||
VIE | |||||
Current assets: | |||||
Cash and cash equivalents | 1.1 | 0.2 | |||
Accounts receivable | 31.3 | 29.3 | |||
Other current assets | 7.7 | 6.4 | |||
Total current assets | 40.1 | 35.9 | |||
Property and equipment, net | 120.9 | 122.6 | |||
Operating lease right-of-use assets | 5.8 | 6 | |||
Goodwill | 19.2 | 15.9 | |||
Intangible assets, net | 4.8 | 3.3 | |||
Other long-term assets | 31.4 | 31.3 | |||
Total assets | 222.2 | 215 | |||
Current liabilities: | |||||
Current portion of long-term debt | 0.9 | 0.8 | |||
Current operating lease liabilities | 1.5 | 1.4 | |||
Accounts payable | 5.6 | 6.7 | |||
Accrued expenses and other current liabilities | 16.6 | 17 | |||
Total current liabilities | 24.6 | 25.9 | |||
Long-term debt, net of current portion | 10.3 | 10.5 | |||
Long-term operating lease liabilities | 4.4 | 4.7 | |||
Total liabilities | $ 39.3 | $ 41.1 | |||
[1] | Our consolidated assets as of March 31, 2020 and December 31, 2019 include total assets of variable interest entities of $222.2 million and $215.0 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2020 and December 31, 2019 include total liabilities of the variable interest entities of $39.3 million and $41.1 million , respectively. See Note 2 , Variable Interest Entities . |
Long-term Debt - Long-term Debt
Long-term Debt - Long-term Debt Outstanding (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Schedule of Outstanding Long-term Debt | ||
Finance lease obligations | $ 381.2 | |
Capital lease obligations | $ 384.1 | |
Total debt and finance lease obligations | 3,362.1 | 3,062.6 |
Less: Current portion | (40.2) | (39.3) |
Long-term debt, net of current portion | 3,321.9 | 3,023.3 |
Term loan facilities | Term loan facilities | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | $ 261.9 | $ 265.2 |
Senior Notes | 5.125% Senior Notes due 2023 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.125% | 5.125% |
Total debt | $ 297.5 | $ 297.3 |
Senior Notes | 5.75% Senior Notes due 2024 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Total debt | $ 697.5 | $ 697.3 |
Senior Notes | 5.75% Senior Notes due 2025 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Total debt | $ 345.8 | $ 345.6 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 4.50% | 4.50% |
Total debt | $ 491.9 | $ 491.7 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Schedule of Outstanding Long-term Debt | ||
Debt instrument interest rate (percent) | 4.75% | 4.75% |
Total debt | $ 491.8 | $ 491.7 |
Other Notes Payable | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | 44.5 | 44.7 |
Revolving Credit Facility | ||
Schedule of Outstanding Long-term Debt | ||
Total debt | $ 350 | $ 45 |
Long-term Debt - Financial Cove
Long-term Debt - Financial Covenants (Details) | 3 Months Ended | 9 Months Ended | 18 Months Ended | |||||||
Mar. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | |
Debt Instrument [Line Items] | ||||||||||
Interest Coverage Ratio | 3 | |||||||||
Leverage Ratio | 4.50 | |||||||||
Forecast | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest Coverage Ratio | 3 | 2 | ||||||||
Leverage Ratio | 5 | 4.25 | 5.50 | 6 | 6.50 | 6.50 | 5.50 | 4.75 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests - Redeemable Noncontrolling Interests Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Redeemable Noncontrolling Interest, Equity, Carrying Amount Roll Forward [Abstract] | ||
Balance at beginning of period | $ 239.6 | |
Net income attributable to noncontrolling interests | 2 | $ 4 |
Distributions declared | (15.5) | (15.3) |
Change in fair value | (20.3) | |
Balance at end of period | 34 | |
Redeemable Noncontrolling Interest | ||
Redeemable Noncontrolling Interest, Equity, Carrying Amount Roll Forward [Abstract] | ||
Balance at beginning of period | 239.6 | 261.7 |
Net income attributable to noncontrolling interests | 2 | 4 |
Distributions declared | (2.1) | (1.8) |
Contribution to joint venture | 3.1 | 0 |
Reclassification to noncontrolling interests | 0 | (11.2) |
Purchase of redeemable noncontrolling interests | (162.3) | 0 |
Exchange transaction | (46.3) | 0 |
Change in fair value | 0 | 20.3 |
Balance at end of period | $ 34 | $ 273 |
Redeemable Noncontrolling Int_4
Redeemable Noncontrolling Interests - Reconciliation of Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | ||
Net income attributable to nonredeemable noncontrolling interests | $ 19.7 | $ 18.9 |
Net income attributable to redeemable noncontrolling interests | 2 | 4 |
Net income attributable to noncontrolling interests | $ 21.7 | $ 22.9 |
Redeemable Noncontrolling Int_5
Redeemable Noncontrolling Interests - Textuals (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Feb. 21, 2018 | Jan. 31, 2020 | Sep. 30, 2019 | Jul. 31, 2019 | Feb. 28, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Feb. 20, 2020 | Dec. 31, 2019 | Dec. 31, 2014 |
Noncontrolling Interest [Line Items] | |||||||||||
Redeemable noncontrolling interests | $ 34 | $ 239.6 | |||||||||
Percentage of shares exercised by investor | 4.30% | 5.60% | 5.60% | ||||||||
Purchase of redeemable noncontrolling interests | $ 162 | $ 65 | $ 163 | $ 162.3 | $ 0 | ||||||
Temporary equity, shares issued (in shares) | 560,957 | ||||||||||
Temporary equity, shares to management investors exchange agreements percentages | 0.60% | ||||||||||
EHHI | |||||||||||
Noncontrolling Interest [Line Items] | |||||||||||
Outstanding common stock of Holdings, fair value | $ 46 | ||||||||||
EHHI | Home Health and Hospice | |||||||||||
Noncontrolling Interest [Line Items] | |||||||||||
Redeemable noncontrolling interest, equity, acquired percent | 83.30% | ||||||||||
Redeemable noncontrolling interests | $ 64 | ||||||||||
Subsidiary's common stock held by subsidiary 's management, Percent | 16.70% | ||||||||||
Holdings And EHHI | |||||||||||
Noncontrolling Interest [Line Items] | |||||||||||
Ownership percentage | 100.00% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Market Approach | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | $ 61.8 | $ 63.5 |
Debt securities | 9.4 | 12.6 |
Market Approach | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 0 | 0 |
Debt securities | 9.4 | 12.6 |
Market Approach | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 61.8 | 63.5 |
Debt securities | 0 | 0 |
Market Approach | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Equity securities | 0 | 0 |
Debt securities | 0 | 0 |
Income Approach | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | 34 | 239.6 |
Income Approach | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | 0 | 0 |
Income Approach | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | 0 | 0 |
Income Approach | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Abstract] | ||
Redeemable noncontrolling interests | $ 34 | $ 239.6 |
Fair Value Measurements - Textu
Fair Value Measurements - Textuals (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Nonrecurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Gains or losses related to non-financial assets and liabilities | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Carrying Amounts and Estimated Fair Values, Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Revolving Credit Facility | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 350 | $ 45 |
Revolving Credit Facility | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 350 | 45 |
Letters of Credit | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 0 | 0 |
Letters of Credit | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 36.7 | 38.9 |
Term loan facilities | Term loan facilities | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 261.9 | 265.2 |
Term loan facilities | Term loan facilities | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 263.3 | $ 266.6 |
Senior Notes | 5.125% Senior Notes due 2023 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.125% | 5.125% |
Senior Notes | 5.125% Senior Notes due 2023 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 297.5 | $ 297.3 |
Senior Notes | 5.125% Senior Notes due 2023 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 298.5 | $ 306.6 |
Senior Notes | 5.75% Senior Notes due 2024 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Senior Notes | 5.75% Senior Notes due 2024 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 697.5 | $ 697.3 |
Senior Notes | 5.75% Senior Notes due 2024 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 703.5 | $ 708.8 |
Senior Notes | 5.75% Senior Notes due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 5.75% | 5.75% |
Senior Notes | 5.75% Senior Notes due 2025 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 345.8 | $ 345.6 |
Senior Notes | 5.75% Senior Notes due 2025 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 344.3 | $ 369.7 |
Senior Notes | 4.50% Senior Notes due 2028 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 4.50% | 4.50% |
Senior Notes | 4.50% Senior Notes due 2028 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 491.9 | $ 491.7 |
Senior Notes | 4.50% Senior Notes due 2028 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 491.3 | $ 519.4 |
Senior Notes | 4.75% Senior Notes due 2030 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument interest rate (percent) | 4.75% | 4.75% |
Senior Notes | 4.75% Senior Notes due 2030 | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 491.8 | $ 491.7 |
Senior Notes | 4.75% Senior Notes due 2030 | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 496.1 | 520 |
Other Notes Payable | Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | 44.5 | 44.7 |
Other Notes Payable | Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying amounts and estimated fair values of financial instruments | $ 44.5 | $ 44.7 |
Share-Based Payments - Textuals
Share-Based Payments - Textuals (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Feb. 29, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards issued (shares) | 400,000 | ||
Restricted Stock | Service Condition | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awards issued (shares) | 200,000 | ||
Restricted Stock | Service and Performance Condition | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance measurement period | 2 years | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options granted (shares) | 100,000 | ||
SARs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
SARs outstanding (in shares) | 115,545 | ||
Fair value of SARs | $ 101 | ||
Cash used to settle award | $ 101 |
Income Taxes - Textuals (Detail
Income Taxes - Textuals (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision for income tax expense | $ 27.1 | $ 30.8 |
Earnings per Common Share - Com
Earnings per Common Share - Computation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Basic Numerator: | ||
Income from continuing operations | $ 108.8 | $ 125.7 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (21.7) | (22.9) |
Less: Income allocated to participating securities | (0.3) | (0.4) |
Income from continuing operations attributable to Encompass Health common shareholders | 86.8 | 102.4 |
Loss from discontinued operations, net of tax | (0.1) | (0.5) |
Net income attributable to Encompass Health common shareholders | $ 86.7 | $ 101.9 |
Basic Denominator: | ||
Basic weighted average common shares outstanding (shares) | 98.2 | 98.4 |
Basic earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 0.88 | $ 1.05 |
Discontinued operations (in dollars per share) | 0 | (0.01) |
Net Income (in dollars per share) | $ 0.88 | $ 1.04 |
Diluted Numerator | ||
Income from continuing operations | $ 108.8 | $ 125.7 |
Less: Net income attributable to noncontrolling interests included in continuing operations | (21.7) | (22.9) |
Income from continuing operations attributable to Encompass Health common shareholders | 87.1 | 102.8 |
Loss from discontinued operations, net of tax | (0.1) | (0.5) |
Net income attributable to Encompass Health common shareholders | $ 87 | $ 102.3 |
Diluted Denominator | ||
Diluted weighted average common shares outstanding (shares) | 99.6 | 99.7 |
Diluted earnings per share attributable to Encompass Health common shareholders: | ||
Continuing operations (in dollars per share) | $ 0.87 | $ 1.04 |
Discontinued operations (in dollars per share) | 0 | (0.01) |
Net income (in dollars per share) | $ 0.87 | $ 1.03 |
Earnings per Common Share - Rec
Earnings per Common Share - Reconciliation of Weighted Average Number of Shares Outstanding (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Basic weighted average common shares outstanding (shares) | 98.2 | 98.4 |
Restricted stock awards, dilutive stock options, and restricted stock units (shares) | 1.4 | 1.3 |
Diluted weighted average common shares outstanding (shares) | 99.6 | 99.7 |
Contingencies and Other Commi_2
Contingencies and Other Commitments (Details) $ in Millions | 1 Months Ended |
Jul. 31, 2019USD ($) | |
Maximum | Settled Litigation | Nichols Litigation | |
Loss Contingencies [Line Items] | |
Cash payment for litigation settlement | $ 0.1 |
Segment Reporting - Textuals (D
Segment Reporting - Textuals (Details) | 3 Months Ended |
Mar. 31, 2020hospitallocationsegmentstate | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Number of states in which entity operates | state | 37 |
Inpatient Rehabilitation | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 33 |
Number of inpatient rehabilitation hospitals operated | 134 |
Number of solely owned inpatient rehabilitation hospitals | 87 |
Number of jointly owned inpatient rehabilitation hospitals | 47 |
Number of inpatient rehabilitation units under management contracts | 3 |
Home Health and Hospice | |
Segment Reporting Information [Line Items] | |
Number of states in which entity operates | state | 31 |
Number of home health locations | location | 245 |
Number of hospice locations | location | 83 |
Number of hospitals or agencies operated as a joint venture | 1 |
Number of solely owned hospital based home health and hospice locations | location | 320 |
Number of jointly owned hospital based home health and hospice locations | location | 8 |
Minimum | Inpatient Rehabilitation | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Minimum | Home Health and Hospice | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 50.00% |
Maximum | Inpatient Rehabilitation | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 97.50% |
Maximum | Home Health and Hospice | |
Segment Reporting Information [Line Items] | |
Joint venture ownership percentage | 81.00% |
Segment Reporting - Segment Rep
Segment Reporting - Segment Reporting Information, Reconciliation of Net Operating Revenues to Segment Adjusted EBITDA (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net operating revenues | $ 1,182 | $ 1,124 |
Costs and Expenses [Abstract] | ||
Salaries and benefits | 679.1 | 620.8 |
Other operating expenses | 159.6 | 150.1 |
Supplies | 45.7 | 40.1 |
Occupancy costs | 20.2 | 19.6 |
Total operating expenses | 1,001.8 | 936.5 |
Other income | 1.9 | (3.7) |
Equity in net income of nonconsolidated affiliates | (0.8) | (2.5) |
Noncontrolling interests | 21.7 | 22.9 |
Operating Segments | ||
Costs and Expenses [Abstract] | ||
Segment Adjusted EBITDA | 256.5 | 276.3 |
Operating Segments | Inpatient Rehabilitation | ||
Segment Reporting Information [Line Items] | ||
Net operating revenues | 909.2 | 870.1 |
Costs and Expenses [Abstract] | ||
Salaries and benefits | 482.3 | 445 |
Other operating expenses | 134.7 | 127.6 |
Supplies | 39.6 | 35.6 |
Occupancy costs | 15.3 | 15.8 |
Total operating expenses | 671.9 | 624 |
Other income | 1.6 | (2.8) |
Equity in net income of nonconsolidated affiliates | (0.6) | (2.1) |
Noncontrolling interests | 20.8 | 21 |
Segment Adjusted EBITDA | 215.5 | 230 |
Capital expenditures | 83.3 | 70.4 |
Operating Segments | Home Health and Hospice | ||
Segment Reporting Information [Line Items] | ||
Net operating revenues | 272.8 | 253.9 |
Costs and Expenses [Abstract] | ||
Cost of services sold (excluding depreciation and amortization) | 130.9 | 116.5 |
Support and overhead costs | 100.2 | 88.8 |
Total operating expenses | 231.1 | 205.3 |
Other income | 0 | 0 |
Equity in net income of nonconsolidated affiliates | (0.2) | (0.4) |
Noncontrolling interests | 0.9 | 2.7 |
Segment Adjusted EBITDA | 41 | 46.3 |
Capital expenditures | $ 1.5 | $ 4.5 |
Segment Reporting - Segment R_2
Segment Reporting - Segment Reporting Information, Total Assets and Investments In and Advances to Nonconsolidated Affiliates (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | [1] | $ 6,137.7 | $ 6,080.7 |
Investments in and advances to nonconsolidated affiliates | 5.7 | 7.4 | |
Operating Segments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 6,198 | 6,114.2 | |
Operating Segments | Inpatient Rehabilitation | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 4,558.8 | 4,501.4 | |
Investments in and advances to nonconsolidated affiliates | 1.8 | 2 | |
Operating Segments | Home Health and Hospice | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 1,639.2 | 1,612.8 | |
Investments in and advances to nonconsolidated affiliates | $ 3.9 | $ 5.4 | |
[1] | Our consolidated assets as of March 31, 2020 and December 31, 2019 include total assets of variable interest entities of $222.2 million and $215.0 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2020 and December 31, 2019 include total liabilities of the variable interest entities of $39.3 million and $41.1 million , respectively. See Note 2 , Variable Interest Entities . |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Adjusted EBITDA to Income from Continuing Operations Before Income Tax Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
General and administrative expenses | $ (35.6) | $ (53.4) |
Depreciation and amortization | (58.8) | (52.5) |
Government, class action, and related settlements | (2.8) | 0 |
Net income attributable to noncontrolling interests | 21.7 | 22.9 |
Income from continuing operations before income tax expense | 135.9 | 156.5 |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total Segment Adjusted EBITDA | 256.5 | 276.3 |
Segment Reconciling Items | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
General and administrative expenses | (35.6) | (53.4) |
Depreciation and amortization | (58.8) | (52.5) |
Loss on disposal of assets | (0.1) | (1.1) |
Government, class action, and related settlements | (2.8) | 0 |
Interest expense and amortization of debt discounts and fees | (43.2) | (37.2) |
Net income attributable to noncontrolling interests | 21.7 | 22.9 |
SARs mark-to-market impact on noncontrolling interests | 0 | 0.8 |
Change in fair market value of equity securities | (2.5) | 0.9 |
Gain on consolidation of Treasure Coast | 2.2 | 0 |
Payroll taxes on SARs exercise | $ (1.5) | $ (0.2) |
Segment Reporting - Reconcili_2
Segment Reporting - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | ||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | [1] | $ 6,137.7 | $ 6,080.7 |
Operating Segments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 6,198 | 6,114.2 | |
Segment Reconciling Items | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Reclassification of noncurrent deferred income tax liabilities to net noncurrent deferred income tax assets | $ (60.3) | $ (33.5) | |
[1] | Our consolidated assets as of March 31, 2020 and December 31, 2019 include total assets of variable interest entities of $222.2 million and $215.0 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2020 and December 31, 2019 include total liabilities of the variable interest entities of $39.3 million and $41.1 million , respectively. See Note 2 , Variable Interest Entities . |
Segment Reporting - Reconcili_3
Segment Reporting - Reconciliation of Revenue from Segments to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | $ 1,182 | $ 1,124 |
Operating Segments | Inpatient Rehabilitation | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 909.2 | 870.1 |
Operating Segments | Inpatient Rehabilitation | Inpatient | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 890 | 847.6 |
Operating Segments | Inpatient Rehabilitation | Outpatient and other | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 19.2 | 22.5 |
Operating Segments | Home Health and Hospice | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 272.8 | 253.9 |
Operating Segments | Home Health and Hospice | Home health | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | 224.8 | 219.5 |
Operating Segments | Home Health and Hospice | Hospice | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Net operating revenues | $ 48 | $ 34.4 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information - Textuals (Details) | 3 Months Ended | ||
Mar. 31, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | |
Condensed Financial Statements, Captions [Line Items] | |||
Encompass Health ownership percentage of subsidiary guarantors (percent) | 100.00% | ||
Senior secured leverage ratio maximum | 2 | ||
Consolidated coverage ratio minimum | 2 | ||
Holdings | |||
Condensed Financial Statements, Captions [Line Items] | |||
Remaining noncontrolling interest | 1.20% | 5.50% |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information - Comprehensive Income Statement (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidating Statements of Operations | ||
Net operating revenues | $ 1,182 | $ 1,124 |
Operating expenses: | ||
Salaries and benefits | 679.1 | 620.8 |
Other operating expenses | 159.6 | 150.1 |
Occupancy costs | 20.2 | 19.6 |
Supplies | 45.7 | 40.1 |
General and administrative expenses | 35.6 | 53.4 |
Depreciation and amortization | 58.8 | 52.5 |
Government, class action, and related settlements | 2.8 | 0 |
Total operating expenses | 1,001.8 | 936.5 |
Interest expense and amortization of debt discounts and fees | 43.2 | 37.2 |
Other expense (income) | 1.9 | (3.7) |
Equity in net income of nonconsolidated affiliates | (0.8) | (2.5) |
Equity in net income of consolidated affiliates | 0 | 0 |
Management fees | 0 | 0 |
Income from continuing operations before income tax expense | 135.9 | 156.5 |
Provision for income tax (benefit) expense | 27.1 | 30.8 |
Income from continuing operations | 108.8 | 125.7 |
Loss from discontinued operations, net of tax | (0.1) | (0.5) |
Net income | 108.7 | 125.2 |
Comprehensive income | 108.7 | 125.2 |
Less: Net income attributable to noncontrolling interests | (21.7) | (22.9) |
Less: Comprehensive income attributable to noncontrolling interests | (21.7) | (22.9) |
Net income attributable to Encompass Health | 87 | 102.3 |
Comprehensive income attributable to Encompass Health | 87 | 102.3 |
Reportable Legal Entities | Encompass Health Corporation | ||
Condensed Consolidating Statements of Operations | ||
Net operating revenues | 4.6 | 5.1 |
Operating expenses: | ||
Salaries and benefits | 16.7 | 15.9 |
Other operating expenses | 9.6 | 10.3 |
Occupancy costs | 0.6 | 0.5 |
Supplies | 0 | 0 |
General and administrative expenses | 34.7 | 39.9 |
Depreciation and amortization | 5.3 | 5 |
Government, class action, and related settlements | 2.8 | |
Total operating expenses | 69.7 | 71.6 |
Interest expense and amortization of debt discounts and fees | 35.8 | 30.1 |
Other expense (income) | (2.3) | (7.7) |
Equity in net income of nonconsolidated affiliates | 0 | 0 |
Equity in net income of consolidated affiliates | (122.2) | (130.2) |
Management fees | (42) | (39.8) |
Income from continuing operations before income tax expense | 65.6 | 81.1 |
Provision for income tax (benefit) expense | (21.5) | (21.7) |
Income from continuing operations | 87.1 | 102.8 |
Loss from discontinued operations, net of tax | (0.1) | (0.5) |
Net income | 87 | 102.3 |
Comprehensive income | 87 | 102.3 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Encompass Health | 87 | 102.3 |
Comprehensive income attributable to Encompass Health | 87 | 102.3 |
Reportable Legal Entities | Guarantor Subsidiaries | ||
Condensed Consolidating Statements of Operations | ||
Net operating revenues | 622.5 | 606.5 |
Operating expenses: | ||
Salaries and benefits | 309.8 | 288.9 |
Other operating expenses | 86.9 | 84.7 |
Occupancy costs | 25.4 | 24.9 |
Supplies | 26.5 | 24 |
General and administrative expenses | 0 | 0 |
Depreciation and amortization | 28.7 | 26.3 |
Government, class action, and related settlements | 0 | |
Total operating expenses | 477.3 | 448.8 |
Interest expense and amortization of debt discounts and fees | 6.3 | 6.2 |
Other expense (income) | (0.4) | (0.3) |
Equity in net income of nonconsolidated affiliates | (0.5) | (2) |
Equity in net income of consolidated affiliates | (17.8) | (17.1) |
Management fees | 30.2 | 29.5 |
Income from continuing operations before income tax expense | 127.4 | 141.4 |
Provision for income tax (benefit) expense | 33 | 37.8 |
Income from continuing operations | 94.4 | 103.6 |
Loss from discontinued operations, net of tax | 0 | 0 |
Net income | 94.4 | 103.6 |
Comprehensive income | 94.4 | 103.6 |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Encompass Health | 94.4 | 103.6 |
Comprehensive income attributable to Encompass Health | 94.4 | 103.6 |
Reportable Legal Entities | Non-guarantor Subsidiaries | ||
Condensed Consolidating Statements of Operations | ||
Net operating revenues | 323.3 | 296.5 |
Operating expenses: | ||
Salaries and benefits | 164.2 | 148 |
Other operating expenses | 52 | 46.8 |
Occupancy costs | 6.7 | 6.5 |
Supplies | 13.2 | 11.6 |
General and administrative expenses | 0 | 0 |
Depreciation and amortization | 15 | 13.1 |
Government, class action, and related settlements | 0 | |
Total operating expenses | 251.1 | 226 |
Interest expense and amortization of debt discounts and fees | 1.4 | 1.3 |
Other expense (income) | 1.6 | (2.5) |
Equity in net income of nonconsolidated affiliates | (0.1) | (0.1) |
Equity in net income of consolidated affiliates | 0 | 0 |
Management fees | 11.8 | 10.3 |
Income from continuing operations before income tax expense | 57.5 | 61.5 |
Provision for income tax (benefit) expense | 9.1 | 10.2 |
Income from continuing operations | 48.4 | 51.3 |
Loss from discontinued operations, net of tax | 0 | 0 |
Net income | 48.4 | 51.3 |
Comprehensive income | 48.4 | 51.3 |
Less: Net income attributable to noncontrolling interests | (21.2) | (21.2) |
Less: Comprehensive income attributable to noncontrolling interests | (21.2) | (21.2) |
Net income attributable to Encompass Health | 27.2 | 30.1 |
Comprehensive income attributable to Encompass Health | 27.2 | 30.1 |
Reportable Legal Entities | Holdings | ||
Condensed Consolidating Statements of Operations | ||
Net operating revenues | 266.8 | 249.5 |
Operating expenses: | ||
Salaries and benefits | 193.3 | 173.1 |
Other operating expenses | 24.1 | 20.8 |
Occupancy costs | 4.8 | 3.7 |
Supplies | 6 | 4.5 |
General and administrative expenses | 0.9 | 13.5 |
Depreciation and amortization | 9.8 | 8.1 |
Government, class action, and related settlements | 0 | |
Total operating expenses | 238.9 | 223.7 |
Interest expense and amortization of debt discounts and fees | 4.9 | 6.4 |
Other expense (income) | (2.2) | 0 |
Equity in net income of nonconsolidated affiliates | (0.2) | (0.4) |
Equity in net income of consolidated affiliates | 0 | 0 |
Management fees | 0 | 0 |
Income from continuing operations before income tax expense | 25.4 | 19.8 |
Provision for income tax (benefit) expense | 6.5 | 4.5 |
Income from continuing operations | 18.9 | 15.3 |
Loss from discontinued operations, net of tax | 0 | 0 |
Net income | 18.9 | 15.3 |
Comprehensive income | 18.9 | 15.3 |
Less: Net income attributable to noncontrolling interests | (0.5) | (1.7) |
Less: Comprehensive income attributable to noncontrolling interests | (0.5) | (1.7) |
Net income attributable to Encompass Health | 18.4 | 13.6 |
Comprehensive income attributable to Encompass Health | 18.4 | 13.6 |
Eliminating Entries | ||
Condensed Consolidating Statements of Operations | ||
Net operating revenues | (35.2) | (33.6) |
Operating expenses: | ||
Salaries and benefits | (4.9) | (5.1) |
Other operating expenses | (13) | (12.5) |
Occupancy costs | (17.3) | (16) |
Supplies | 0 | 0 |
General and administrative expenses | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Government, class action, and related settlements | 0 | |
Total operating expenses | (35.2) | (33.6) |
Interest expense and amortization of debt discounts and fees | (5.2) | (6.8) |
Other expense (income) | 5.2 | 6.8 |
Equity in net income of nonconsolidated affiliates | 0 | 0 |
Equity in net income of consolidated affiliates | 140 | 147.3 |
Management fees | 0 | 0 |
Income from continuing operations before income tax expense | (140) | (147.3) |
Provision for income tax (benefit) expense | 0 | 0 |
Income from continuing operations | (140) | (147.3) |
Loss from discontinued operations, net of tax | 0 | 0 |
Net income | (140) | (147.3) |
Comprehensive income | (140) | (147.3) |
Less: Net income attributable to noncontrolling interests | 0 | 0 |
Less: Comprehensive income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Encompass Health | (140) | (147.3) |
Comprehensive income attributable to Encompass Health | $ (140) | $ (147.3) |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information - Balance Sheet (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Current assets: | |||||
Cash and cash equivalents | $ 104.9 | $ 94.8 | $ 56.1 | $ 69.2 | |
Restricted cash | 56.7 | 57.4 | 59 | 59 | |
Accounts receivable | 543.4 | 506.1 | |||
Other current assets | 79.5 | 97.5 | |||
Total current assets | 784.5 | 755.8 | |||
Property and equipment, net | 2,003.3 | 1,959.3 | |||
Operating lease right-of-use assets | 267.9 | 276.5 | |||
Goodwill | 2,312.1 | 2,305.2 | |||
Intangible assets, net | 464.7 | 476.3 | |||
Deferred income tax assets | 1.5 | 2.9 | |||
Other long-term assets | 303.7 | 304.7 | |||
Intercompany notes receivable | 0 | ||||
Intercompany receivable and investments in consolidated affiliates | 0 | 0 | |||
Total assets | [1] | 6,137.7 | 6,080.7 | ||
Current liabilities: | |||||
Current portion of long-term debt | 40.2 | 39.3 | |||
Current operating lease liabilities | 40.8 | 40.4 | |||
Accounts payable | 98 | 94.6 | |||
Accrued expenses and other current liabilities | 407.2 | 546.7 | |||
Total current liabilities | 586.2 | 721 | |||
Long-term debt, net of current portion | 3,321.9 | 3,023.3 | |||
Long-term operating lease liabilities | 235.1 | 243.8 | |||
Intercompany notes payable | 0 | ||||
Other long-term liabilities | 163.3 | 159.9 | |||
Intercompany payable | 0 | 0 | |||
Total liabilities | 4,306.5 | 4,148 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 34 | 239.6 | |||
Shareholders’ equity: | |||||
Encompass Health shareholders’ equity | 1,443.9 | 1,352.2 | |||
Noncontrolling interests | 353.3 | 340.9 | |||
Total shareholders’ equity | 1,797.2 | 1,693.1 | 1,616.5 | 1,557 | |
Total liabilities and shareholders' equity | [1] | 6,137.7 | 6,080.7 | ||
Reportable Legal Entities | Encompass Health Corporation | |||||
Current assets: | |||||
Cash and cash equivalents | 79 | 53.7 | 34.7 | 41.5 | |
Restricted cash | 0 | 0 | 0 | 0 | |
Accounts receivable | 0 | 0 | |||
Other current assets | 79.8 | 64.3 | |||
Total current assets | 158.8 | 118 | |||
Property and equipment, net | 138.5 | 133.4 | |||
Operating lease right-of-use assets | 9.7 | 10.1 | |||
Goodwill | 0 | 0 | |||
Intangible assets, net | 15.8 | 17.7 | |||
Deferred income tax assets | 52.6 | 27.2 | |||
Other long-term assets | 51.7 | 53.6 | |||
Intercompany notes receivable | 737.8 | ||||
Intercompany receivable and investments in consolidated affiliates | 4,245.7 | 3,155.4 | |||
Total assets | 4,672.8 | 4,253.2 | |||
Current liabilities: | |||||
Current portion of long-term debt | 17 | 17 | |||
Current operating lease liabilities | 1.4 | 1.3 | |||
Accounts payable | 12.5 | 9.8 | |||
Accrued expenses and other current liabilities | 171.5 | 147.4 | |||
Total current liabilities | 202.4 | 175.5 | |||
Long-term debt, net of current portion | 2,973 | 2,670.6 | |||
Long-term operating lease liabilities | 8.6 | 9 | |||
Intercompany notes payable | 0 | ||||
Other long-term liabilities | 44.9 | 45.9 | |||
Intercompany payable | 0 | 0 | |||
Total liabilities | 3,228.9 | 2,901 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 0 | 0 | |||
Shareholders’ equity: | |||||
Encompass Health shareholders’ equity | 1,443.9 | 1,352.2 | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | 1,443.9 | 1,352.2 | |||
Total liabilities and shareholders' equity | 4,672.8 | 4,253.2 | |||
Reportable Legal Entities | Guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 3.7 | 5.2 | 3.5 | 3 | |
Restricted cash | 0 | 0 | 0 | 0 | |
Accounts receivable | 270.8 | 280.4 | |||
Other current assets | 34.7 | 35.4 | |||
Total current assets | 309.2 | 321 | |||
Property and equipment, net | 1,268 | 1,246 | |||
Operating lease right-of-use assets | 158 | 171.5 | |||
Goodwill | 912.2 | 912.2 | |||
Intangible assets, net | 98.9 | 101.7 | |||
Deferred income tax assets | 11.1 | 11.1 | |||
Other long-term assets | 86.8 | 85.4 | |||
Intercompany notes receivable | 0 | ||||
Intercompany receivable and investments in consolidated affiliates | 657.6 | 523.6 | |||
Total assets | 3,501.8 | 3,372.5 | |||
Current liabilities: | |||||
Current portion of long-term debt | 10.8 | 10.4 | |||
Current operating lease liabilities | 19.2 | 21.9 | |||
Accounts payable | 57.2 | 56.5 | |||
Accrued expenses and other current liabilities | 110.4 | 108.7 | |||
Total current liabilities | 197.6 | 197.5 | |||
Long-term debt, net of current portion | 302.5 | 305.4 | |||
Long-term operating lease liabilities | 143.5 | 153.9 | |||
Intercompany notes payable | 0 | ||||
Other long-term liabilities | 12 | 12.2 | |||
Intercompany payable | 0 | 0 | |||
Total liabilities | 655.6 | 669 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 0 | 0 | |||
Shareholders’ equity: | |||||
Encompass Health shareholders’ equity | 2,846.2 | 2,703.5 | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | 2,846.2 | 2,703.5 | |||
Total liabilities and shareholders' equity | 3,501.8 | 3,372.5 | |||
Reportable Legal Entities | Non-guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 7.8 | 6 | 5.8 | 5.1 | |
Restricted cash | 56.7 | 57.4 | 59 | 59 | |
Accounts receivable | 131.6 | 125.6 | |||
Other current assets | 45.1 | 9.3 | |||
Total current assets | 241.2 | 198.3 | |||
Property and equipment, net | 567.4 | 551.2 | |||
Operating lease right-of-use assets | 80.1 | 86.5 | |||
Goodwill | 329 | 323 | |||
Intangible assets, net | 64.8 | 65.3 | |||
Deferred income tax assets | 0.1 | 0.1 | |||
Other long-term assets | 152.9 | 151.6 | |||
Intercompany notes receivable | 0 | ||||
Intercompany receivable and investments in consolidated affiliates | 0 | 0 | |||
Total assets | 1,435.5 | 1,376 | |||
Current liabilities: | |||||
Current portion of long-term debt | 3.9 | 3.8 | |||
Current operating lease liabilities | 14.2 | 16 | |||
Accounts payable | 25 | 24.3 | |||
Accrued expenses and other current liabilities | 134 | 109.2 | |||
Total current liabilities | 177.1 | 153.3 | |||
Long-term debt, net of current portion | 40.6 | 41.6 | |||
Long-term operating lease liabilities | 69.1 | 73.6 | |||
Intercompany notes payable | 0 | ||||
Other long-term liabilities | 105 | 100.3 | |||
Intercompany payable | 66 | 66 | |||
Total liabilities | 457.8 | 434.8 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 34 | 31.4 | |||
Shareholders’ equity: | |||||
Encompass Health shareholders’ equity | 590.4 | 568.9 | |||
Noncontrolling interests | 353.3 | 340.9 | |||
Total shareholders’ equity | 943.7 | 909.8 | |||
Total liabilities and shareholders' equity | 1,435.5 | 1,376 | |||
Reportable Legal Entities | Holdings | |||||
Current assets: | |||||
Cash and cash equivalents | 14.4 | 29.9 | 12.1 | 19.6 | |
Restricted cash | 0 | 0 | 0 | 0 | |
Accounts receivable | 141 | 100.1 | |||
Other current assets | 7.2 | 7.8 | |||
Total current assets | 162.6 | 137.8 | |||
Property and equipment, net | 29.4 | 28.7 | |||
Operating lease right-of-use assets | 43.2 | 43.7 | |||
Goodwill | 1,070.9 | 1,070 | |||
Intangible assets, net | 285.2 | 291.6 | |||
Deferred income tax assets | 0 | 0 | |||
Other long-term assets | 12.3 | 14.1 | |||
Intercompany notes receivable | 0 | ||||
Intercompany receivable and investments in consolidated affiliates | 7.5 | 0 | |||
Total assets | 1,611.1 | 1,585.9 | |||
Current liabilities: | |||||
Current portion of long-term debt | 8.5 | 8.1 | |||
Current operating lease liabilities | 13.6 | 12.1 | |||
Accounts payable | 3.3 | 4 | |||
Accrued expenses and other current liabilities | 78.6 | 200.7 | |||
Total current liabilities | 104 | 224.9 | |||
Long-term debt, net of current portion | 5.8 | 5.7 | |||
Long-term operating lease liabilities | 29.6 | 31.9 | |||
Intercompany notes payable | 737.8 | ||||
Other long-term liabilities | 63.6 | 37 | |||
Intercompany payable | 0 | 4.4 | |||
Total liabilities | 203 | 1,041.7 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 0 | 208.2 | |||
Shareholders’ equity: | |||||
Encompass Health shareholders’ equity | 1,408.1 | 336 | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | 1,408.1 | 336 | |||
Total liabilities and shareholders' equity | 1,611.1 | 1,585.9 | |||
Eliminating Entries | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Restricted cash | 0 | 0 | $ 0 | $ 0 | |
Accounts receivable | 0 | 0 | |||
Other current assets | (87.3) | (19.3) | |||
Total current assets | (87.3) | (19.3) | |||
Property and equipment, net | 0 | 0 | |||
Operating lease right-of-use assets | (23.1) | (35.3) | |||
Goodwill | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Deferred income tax assets | (62.3) | (35.5) | |||
Other long-term assets | 0 | 0 | |||
Intercompany notes receivable | (737.8) | ||||
Intercompany receivable and investments in consolidated affiliates | (4,910.8) | (3,679) | |||
Total assets | (5,083.5) | (4,506.9) | |||
Current liabilities: | |||||
Current portion of long-term debt | 0 | 0 | |||
Current operating lease liabilities | (7.6) | (10.9) | |||
Accounts payable | 0 | 0 | |||
Accrued expenses and other current liabilities | (87.3) | (19.3) | |||
Total current liabilities | (94.9) | (30.2) | |||
Long-term debt, net of current portion | 0 | 0 | |||
Long-term operating lease liabilities | (15.7) | (24.6) | |||
Intercompany notes payable | (737.8) | ||||
Other long-term liabilities | (62.2) | (35.5) | |||
Intercompany payable | (66) | (70.4) | |||
Total liabilities | (238.8) | (898.5) | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 0 | 0 | |||
Shareholders’ equity: | |||||
Encompass Health shareholders’ equity | (4,844.7) | (3,608.4) | |||
Noncontrolling interests | 0 | 0 | |||
Total shareholders’ equity | (4,844.7) | (3,608.4) | |||
Total liabilities and shareholders' equity | $ (5,083.5) | $ (4,506.9) | |||
[1] | Our consolidated assets as of March 31, 2020 and December 31, 2019 include total assets of variable interest entities of $222.2 million and $215.0 million , respectively, which cannot be used by us to settle the obligations of other entities. Our consolidated liabilities as of March 31, 2020 and December 31, 2019 include total liabilities of the variable interest entities of $39.3 million and $41.1 million , respectively. See Note 2 , Variable Interest Entities . |
Condensed Consolidating Finan_6
Condensed Consolidating Financial Information - Cash Flow Statement (Details) - USD ($) $ in Millions | Feb. 18, 2020 | Feb. 21, 2018 | Sep. 30, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Condensed Consolidating Statements of Cash Flows | |||||
Net cash provided by operating activities | $ 29.3 | $ 159.9 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (83.5) | (72.3) | |||
Acquisitions of businesses, net of cash acquired | (1.1) | (13.7) | |||
Funding of intercompany note receivable | 0 | 0 | |||
Proceeds from repayment of intercompany note receivable | 0 | ||||
Other, net | 1.6 | (5.5) | |||
Net cash used in investing activities | (83) | (91.5) | |||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | 0 | ||||
Principal borrowings on intercompany note payable | 0 | ||||
Principal payments on intercompany note payable | 0 | ||||
Borrowings on revolving credit facility | 330 | 25 | |||
Payments on revolving credit facility | (25) | (30) | |||
Dividends paid on common stock | (29) | (28.3) | |||
Purchase of equity interests in consolidated affiliates | $ (162) | $ (65) | $ (163) | (162.3) | 0 |
Distributions paid to noncontrolling interests of consolidated affiliates | (19.1) | (19.5) | |||
Taxes paid on behalf of employees for shares withheld | (15.6) | (15.9) | |||
Other, net | (7.9) | (13) | |||
Change in intercompany advances | 0 | 0 | |||
Net cash provided by (used in) financing activities | 71.1 | (81.7) | |||
Increase (decrease) in cash, cash equivalents, and restricted cash | 17.4 | (13.3) | |||
Cash, cash equivalents, and restricted cash at beginning of period | 159.6 | 133.5 | |||
Cash, cash equivalents, and restricted cash at end of period | 177 | 120.2 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||
Cash and cash equivalents at beginning of period | 94.8 | 69.2 | |||
Restricted cash at beginning of period | 57.4 | 59 | |||
Restricted cash included in other long-term assets at beginning of period | 7.4 | 5.3 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 159.6 | 133.5 | |||
Cash and cash equivalents at end of period | 104.9 | 56.1 | |||
Restricted cash at end of period | 56.7 | 59 | |||
Restricted cash included in other long-term assets at end of period | 15.4 | 5.1 | |||
Cash, cash equivalents, and restricted cash at end of period | 177 | 120.2 | |||
Supplemental schedule of noncash financing activity: | |||||
Capital contribution of intercompany note | 0 | ||||
Encompass Health Corporation | |||||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | 0 | ||||
Guarantor Subsidiaries | |||||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | 0 | ||||
Reportable Legal Entities | Encompass Health Corporation | |||||
Condensed Consolidating Statements of Cash Flows | |||||
Net cash provided by operating activities | (31.2) | 18.6 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (9.3) | (6.8) | |||
Acquisitions of businesses, net of cash acquired | 0 | 0 | |||
Funding of intercompany note receivable | (15) | (8) | |||
Proceeds from repayment of intercompany note receivable | 5 | ||||
Other, net | (2.8) | (4) | |||
Net cash used in investing activities | (27.1) | (13.8) | |||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | 0 | ||||
Principal payments on intercompany note payable | 0 | ||||
Borrowings on revolving credit facility | 330 | 25 | |||
Payments on revolving credit facility | (25) | (30) | |||
Dividends paid on common stock | (28.9) | (28.2) | |||
Purchase of equity interests in consolidated affiliates | (162.3) | ||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | (14.6) | (14.7) | |||
Other, net | (8.5) | (14.7) | |||
Change in intercompany advances | (7.1) | 51 | |||
Net cash provided by (used in) financing activities | 83.6 | (11.6) | |||
Increase (decrease) in cash, cash equivalents, and restricted cash | 25.3 | (6.8) | |||
Cash, cash equivalents, and restricted cash at beginning of period | 53.7 | 41.5 | |||
Cash, cash equivalents, and restricted cash at end of period | 79 | 34.7 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||
Cash and cash equivalents at beginning of period | 53.7 | 41.5 | |||
Restricted cash at beginning of period | 0 | 0 | |||
Restricted cash included in other long-term assets at beginning of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 53.7 | 41.5 | |||
Cash and cash equivalents at end of period | 79 | 34.7 | |||
Restricted cash at end of period | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at end of period | 79 | 34.7 | |||
Supplemental schedule of noncash financing activity: | |||||
Capital contribution of intercompany note | 853 | ||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||
Condensed Consolidating Statements of Cash Flows | |||||
Net cash provided by operating activities | 117.7 | 89.6 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (49.5) | (32.5) | |||
Acquisitions of businesses, net of cash acquired | 0 | 0 | |||
Funding of intercompany note receivable | 0 | ||||
Proceeds from repayment of intercompany note receivable | 0 | ||||
Other, net | 0.7 | (0.1) | |||
Net cash used in investing activities | (48.8) | (32.6) | |||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | 0 | ||||
Principal payments on intercompany note payable | 0 | ||||
Borrowings on revolving credit facility | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | |||
Dividends paid on common stock | 0 | 0 | |||
Purchase of equity interests in consolidated affiliates | 0 | ||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | 0 | 0 | |||
Other, net | (2.5) | (2.1) | |||
Change in intercompany advances | (67.9) | (54.4) | |||
Net cash provided by (used in) financing activities | (70.4) | (56.5) | |||
Increase (decrease) in cash, cash equivalents, and restricted cash | (1.5) | 0.5 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 5.2 | 3 | |||
Cash, cash equivalents, and restricted cash at end of period | 3.7 | 3.5 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||
Cash and cash equivalents at beginning of period | 5.2 | 3 | |||
Restricted cash at beginning of period | 0 | 0 | |||
Restricted cash included in other long-term assets at beginning of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 5.2 | 3 | |||
Cash and cash equivalents at end of period | 3.7 | 3.5 | |||
Restricted cash at end of period | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at end of period | 3.7 | 3.5 | |||
Supplemental schedule of noncash financing activity: | |||||
Capital contribution of intercompany note | 0 | ||||
Reportable Legal Entities | Non-guarantor Subsidiaries | |||||
Condensed Consolidating Statements of Cash Flows | |||||
Net cash provided by operating activities | 56.8 | 42.4 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (23.4) | (29.4) | |||
Acquisitions of businesses, net of cash acquired | 0 | 0 | |||
Funding of intercompany note receivable | 0 | 0 | |||
Proceeds from repayment of intercompany note receivable | 0 | ||||
Other, net | 3.9 | (0.7) | |||
Net cash used in investing activities | (19.5) | (30.1) | |||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | 0 | ||||
Principal borrowings on intercompany note payable | 0 | ||||
Principal payments on intercompany note payable | 0 | ||||
Borrowings on revolving credit facility | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | |||
Dividends paid on common stock | 0 | ||||
Purchase of equity interests in consolidated affiliates | 0 | ||||
Distributions paid to noncontrolling interests of consolidated affiliates | (19.1) | (19.5) | |||
Taxes paid on behalf of employees for shares withheld | 0 | 0 | |||
Other, net | 5 | 5.6 | |||
Change in intercompany advances | (14.1) | 2.1 | |||
Net cash provided by (used in) financing activities | (28.2) | (11.8) | |||
Increase (decrease) in cash, cash equivalents, and restricted cash | 9.1 | 0.5 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 70.8 | 69.4 | |||
Cash, cash equivalents, and restricted cash at end of period | 79.9 | 69.9 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||
Cash and cash equivalents at beginning of period | 6 | 5.1 | |||
Restricted cash at beginning of period | 57.4 | 59 | |||
Restricted cash included in other long-term assets at beginning of period | 7.4 | 5.3 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 70.8 | 69.4 | |||
Cash and cash equivalents at end of period | 7.8 | 5.8 | |||
Restricted cash at end of period | 56.7 | 59 | |||
Restricted cash included in other long-term assets at end of period | 15.4 | 5.1 | |||
Cash, cash equivalents, and restricted cash at end of period | 79.9 | 69.9 | |||
Supplemental schedule of noncash financing activity: | |||||
Capital contribution of intercompany note | 0 | ||||
Reportable Legal Entities | Holdings | |||||
Condensed Consolidating Statements of Cash Flows | |||||
Net cash provided by operating activities | (114) | 9.3 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (1.3) | (3.6) | |||
Acquisitions of businesses, net of cash acquired | (1.1) | (13.7) | |||
Funding of intercompany note receivable | 0 | 0 | |||
Proceeds from repayment of intercompany note receivable | 0 | ||||
Other, net | (0.2) | (0.7) | |||
Net cash used in investing activities | (2.6) | (18) | |||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | 8 | ||||
Principal borrowings on intercompany note payable | 15 | ||||
Principal payments on intercompany note payable | (5) | ||||
Borrowings on revolving credit facility | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | |||
Dividends paid on common stock | (0.1) | (0.1) | |||
Purchase of equity interests in consolidated affiliates | 0 | ||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | (1) | (1.2) | |||
Other, net | (1.9) | (1.8) | |||
Change in intercompany advances | 89.1 | 1.3 | |||
Net cash provided by (used in) financing activities | 101.1 | 1.2 | |||
Increase (decrease) in cash, cash equivalents, and restricted cash | (15.5) | (7.5) | |||
Cash, cash equivalents, and restricted cash at beginning of period | 29.9 | 19.6 | |||
Cash, cash equivalents, and restricted cash at end of period | 14.4 | 12.1 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||
Cash and cash equivalents at beginning of period | 29.9 | 19.6 | |||
Restricted cash at beginning of period | 0 | 0 | |||
Restricted cash included in other long-term assets at beginning of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 29.9 | 19.6 | |||
Cash and cash equivalents at end of period | 14.4 | 12.1 | |||
Restricted cash at end of period | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at end of period | 14.4 | 12.1 | |||
Supplemental schedule of noncash financing activity: | |||||
Capital contribution of intercompany note | (853) | ||||
Eliminating Entries | |||||
Condensed Consolidating Statements of Cash Flows | |||||
Net cash provided by operating activities | 0 | 0 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | 0 | 0 | |||
Acquisitions of businesses, net of cash acquired | 0 | 0 | |||
Funding of intercompany note receivable | 15 | 8 | |||
Proceeds from repayment of intercompany note receivable | (5) | ||||
Other, net | 0 | 0 | |||
Net cash used in investing activities | 15 | 3 | |||
Cash flows from financing activities: | |||||
Principal borrowings on intercompany note payable | (8) | ||||
Principal borrowings on intercompany note payable | (15) | ||||
Principal payments on intercompany note payable | 5 | ||||
Borrowings on revolving credit facility | 0 | 0 | |||
Payments on revolving credit facility | 0 | 0 | |||
Dividends paid on common stock | 0 | 0 | |||
Purchase of equity interests in consolidated affiliates | 0 | ||||
Distributions paid to noncontrolling interests of consolidated affiliates | 0 | 0 | |||
Taxes paid on behalf of employees for shares withheld | 0 | 0 | |||
Other, net | 0 | 0 | |||
Change in intercompany advances | 0 | 0 | |||
Net cash provided by (used in) financing activities | (15) | (3) | |||
Increase (decrease) in cash, cash equivalents, and restricted cash | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at end of period | 0 | 0 | |||
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | |||||
Cash and cash equivalents at beginning of period | 0 | 0 | |||
Restricted cash at beginning of period | 0 | 0 | |||
Restricted cash included in other long-term assets at beginning of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at beginning of period | 0 | 0 | |||
Cash and cash equivalents at end of period | 0 | 0 | |||
Restricted cash at end of period | 0 | 0 | |||
Restricted cash included in other long-term assets at end of period | 0 | 0 | |||
Cash, cash equivalents, and restricted cash at end of period | 0 | $ 0 | |||
Supplemental schedule of noncash financing activity: | |||||
Capital contribution of intercompany note | $ 0 |